Lagos State Blaze the Trail as the Foremost State on Green Bond Issuance in Nigeria


Speech by the Executive Governor of Lagos State on the Occasion of the Signing of the Memorandum of Understanding Between Lagos State and Implementing Partners of the Nigerian Green Bond Market Development Programme

Distinguished Guests

Dear Changemakers,

 It is my pleasure to welcome you all today to the signing of the MOU for the Lagos Green Bond Market Development Programme.  

As the world prepares for the UN General Assembly next week, and COP26 next month in Glasgow, the foremost thought in everyone’s mind is on the Global Goals agenda, especially as it pertains to the Circular Economy (SDG 12) and Climate Change (SDG 13)

Climate change is affecting all of us, but it is expected to hit developing countries the hardest – especially low-lying states such as Lagos. Climate change is, however – despite its possible devastating effects – being increasingly viewed as a gateway to new business opportunities, opening many profitable ways for investors to help protect the planet. One such way is through Green Bonds.

The world’s first Green Bond was issued by the World Bank in 2008 and the market continues to grow, with issuance now in the USD250 billion range. Indeed it is estimated that there is up to $1 trillion available financing for Green and Bonds.

Lagos State is particularly mindful of the effects of climate change, and as such has shown and continues to show its commitment to achieving the Sustainable Development Goals (SDGs), a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.

To achieve these lofty goals however, funding is required – far in excess of what the state can currently generate – and very very urgently.

The financial sector will therefore need to play a vital role in accelerating the local market’s ability to provide the required support, by expanding to green lending by as an alternative source of funding for financing eligible green projects and assets in Lagos State.

That is what we see here today and I heartily commend and thank our partners, the Financial Center for Sustainability (FC4S), FMDQ and FSD Africa, funded by the UK Government who are supporting this development programme.

This Green Bond Framework Development Program is a crucial first step towards creating a viable financing option for future green and sustainability projects.

There is no doubt that Green Bonds can assist in unlocking sustainable investment opportunities in Lagos State, opening the door to advance adoption of innovative new technologies, financing of projects that provide green jobs, and promote economic and climate resiliency.

With a current population of over 22 Million citizens and being the smallest land size of less than one percent of Nigeria’s land mass, Lagos is generating in excess of 14 million metric tonnes of waste annually comprising mostly of plastics, liquid and organic wastes, out of which 65 percent ends up at the biggest dumpsite located at Olusosun in Ikeja. The Olusosun dumpsite is due for closure in another three years while the other five dumpsites in different parts of the State do not have as much capacity and some are on the verge of closure due to ecological reasons. Presently, there is no room for expansion because almost all parts of the state are fully built up. The implication of this is that there is no room to set up a dumpsite or landfill sites for waste anymore leaving us with no alternative but to fully embrace circular economy which in the long run may lead to zero waste. 

With an expected population growth to 40 million inhabitants by the year 2050, the state government is saddled with not only delivering on economic growth but mitigating against adverse effect on climate change and waste generation. These are all opportunities that Green Bonds can be used to address.

As a government we are committed through our SDG-aligned development agenda (known as THEMES) to utilize our very limited resources more efficiently for which circular economy is a promising and viable alternative.  Public spending and investments by itself may not be enough to deliver on circular societies, therefore the need to channel more private investments for the transition to a zero waste and circular economy as well as achieving the Sustainable Development goals as a State is very crucial.

I strongly believe that the green bond programme will open the doors of deep sustainable funds for infrastructure and social development for Lagos, being the biggest player in the sub-national capital market, and therefore open new doors overall for lots of others. 

As a state, we embrace the transparency and commitment that comes with a Green Finance framework. We believe it sends an important signal to investors in the market about who we are – a state that is fiscally responsible, prudent and disciplined.

This has indeed been re-affirmed by our ratings upgrade by Fitch Ratings, an Internationally renowned rating agency, from AA+ (nga) to AAA(nga) for ‘good standing in terms of its debt sustainability and resilience’, which happened just yesterday.

It is our intention to continue to validate this reality – as well as our commitment to building a Greater, Circular, Climate-resilient and Prosperous Lagos State which is unwavering.

This initiative will go a long way towards ensuring it is actualised and we look forward to continuing to blaze the trail of leadership, financial accountability, innovation and sustainability.

I thank you all for listening.