Low awareness a challenge to Green Bond investment in Nigeria- Experts

Some financial experts on Monday expressed decried the low level of awareness on green bonds investment in Nigeria.

They experts, in separate interviews journalists in Lagos, expressed their concerns while reacting to the launch of green bond rules by the Securities and Exchange Commission (SEC).

Green bonds were created to fund projects that have positive environmental and/or climate benefits.

Majority of the green bonds issued are asset-linked bonds. Proceeds from these bonds are earmarked for green projects, but are backed by the issuer’s entire balance sheet.

The financial experts called for enhanced sensitisation programme by the commission to sustain the confidence of both issuers and investors in green bond investment.

Prof. Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, said the level of awareness with regard to green bond was low.

Uwaleke called for a great deal of sensitisation and awareness campaigns to sustain the confidence of both issuers and investors alike in the investment initiative.

“A great deal of sensitisation and awareness campaigns should be embarked upon highlighting the benefits of green bonds to Issuers (whether governments or corporates), Investors and the economy,” he said.

Uwaleke said the publication and launch of green bonds rules by the SEC was a welcome development that would go a long way in promoting that asset class.

He said like the Sukuk, which attracted a certain group of investors, green bonds unlocked funds from environmentally-friendly investors since proceeds were usually earmarked for projects that did not hurt the environment.

Prof. Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University Ago-Iwoye, Ogun said much enlightenment was required for issuers and investors to understand the potential of green bonds.

“What is important is for the public to understand what green bond is all about because local investors don’t know much about it and could be skeptical about investing in it.

“So, much enlightenment is required apart from the confusion about the variety of bonds that are being introduced successively in recent time,” Tella said.

Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said the recent rules and guidelines released by SEC was a welcome development.

Omordion urged SEC to go out to educate the public on the importance of saving and investing in green bonds and other securities.

He noted that government should develop infrastructure to boost investors’ confidence, which would boost patronage for corporate and other bonds.

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