Lagos Raises N29.3bn First Ever Green Bond, As Sanwo-Olu Finances Climate Resilient Project 

•State raises N230 billion in capital market to invest in Environment, Transportation, healthcare, others •Sanwo-Olu: ‘Bonds’ oversubscription shows investors’ trust’

By BENJAMIN OMOIKE

LAGOS, Nigeria – Lagos State has set a new record in its drive to unlock long-term infrastructure finance from the capital markets. The State, in a historic ceremony held on Thursday, successfully issued N14.815 billion Series Three Green Bond — the first ever to be issued by a sub national government in Nigeria.

Also at the event held at Balmoral Hall, Victoria Island, the State allotted N230 billion Series IV Conventional Bond at 16.25 per cent coupon rate. Both bonds were issued under the N1 trillion Debt and Hybrid Instruments Issuance Programme. 

Governor Babajide Sanwo-Olu said the development showed investors’ bold statement of confidence in Lagos’ future and a testament to the State’s shared commitment to sustainable development.

The Green Bond, which was set out to raise N14.815 billion at coupon rate of 16.00 per cent, received bidding totaling N29.29 billion at the conclusion of the book, with N27.79 billion falling within the State’s price guidance.

In the Conventional Bond, Lagos targeted to raise N200 billion at the capital market, but the bond was oversubscribed to tune of N310.06 billion, with N304 billion within the range of advised coupon.

Lagos, however, opted for green shoe option, raising N230 billion at 16.25 per cent coupon from the oversubscribed bond.

Sanwo-Olu said the transaction was the largest bond issuance undertaken by the Lagos State Government, thanking the issuing parties and advisor that worked with the State to achieve the target. 

The Governor hailed investors who subscribed to the deal, stressing that the Green Bond highlighted his administration’s vision on environmental responsibility. The entire investment, he said, would improve the lives, livelihoods and aspirations of the State’s residents.

He said: “Today, Lagos once again demonstrates the power of possibilities. We celebrate two major achievements — the successful issuance of the Series III Green Bond and the Series IV Conventional Bond under our N1 Trillion Debt and Hybrid Instruments Issuance Programme. This is not just a financial transaction; it is a bold statement of confidence in Lagos’ future and a testament to our shared commitment to sustainable development.

“This transaction is now the largest bond issuance ever undertaken by Lagos State Government. I am humbled by the depth of confidence the investment community continues to demonstrate towards Lagos State. This trust is not taken for granted. Lagos State Government will continue to pursue solid economic fundamentals, transparent fiscal practices, infrastructure development, and environmental protection and preservation.”

Sanwo-Olu said the proceeds from the issuances would be channelled into critical infrastructure in transportation, housing, the environment, healthcare, education, urban renewal, and provision of other sustainable infrastructure that would be serve the future needs of the State. 

The Green Bond, he said, further testified to Lagos’ commitment to sustainable development, environmental protection, preservation, and climate resilience, aligning with the his administration’s long-term strategy to build a State that would not only be prosperous but also environmentally secure for future generations.

The Governor also said Lagos had continued to win capital market investors’ confidence, since its first bond issuance, noting that Lagos became the first sub national to issue the Sukuk Bond under its Series Il issuance Programme).

“As we gather here to execute the transaction documentation for the issuance of the Green and Conventional Bonds, we reiterate our commitment to accountability and efficiency, while ensuring that every resource entrusted to us translates into tangible improvements in the lives of our citizens,” Sanwo-Olu said.

The Governor thanked President Bola Ahmed Tinubu, the coordinating Minister of Economy, Mr. Wale Edun, the State team and investors’ group for making the target attainable.

Commissioner for Finance, Mr. Yomi Oluyomi, said the rigorous selection of beneficiary projects in the Green Bond underscored the State’s commitment to financing projects that would directly impact the State’s growth in line with Sustainable Development Goals. 

The Commissioner said Green Bond met global standards, as certified by globally recognised Climate Bond Initiative. 

He noted that the State would have allotted all the N310.06 billion in the Conventional Bond but was constrained by regulations guiding the transaction. 

The issuances are a testament to the laudable achievement and testament to the sustained willingness of Lagos to access and responsibly utilise the domestic capital market and the tremendous support the investors have continued to show the State,” Oluyomi said.

Mr. Bolaji Balogun, the Chief Executive Officer of Chapel Hill Denham, financial advisor for the transaction, described the transaction as the new standard set by Lagos State Government.

Balogun said Lagos remained the only sub national that retained investors’ trust, noting that many states could not issue bond of the scale because of lack of transparency in their way on conducting business.

The United Kingdom Deputy High Commissioner, Mr. Jonny Baxter, represented by Ms. Temilola Akinrinade, congratulated Lagos and its partners on the development, noting that the bond issuances came at a time when countries were shifting to long term finance to drive investment in sustainable infrastructure.

“The investors’s response shows a clear confidence in Lagos State’s strategy, planning and financial discipline. It also reflects Nigeria’s recent economic performance led by President Bola Ahmed Tinubu, which has now opened up new frontiers for growth and opportunities,” Akinrinade said.