Green Bonds Vital for Nigeria's Energy Financing Gap

During the 117th Power Dialogue held in Abuja, experts identified green bonds as a viable pathway to mobilize domestic capital to address Nigeria's persistent energy access financing gap, which impacts approximately 85 million people. Luci Eworo, a Senior Portfolio Officer at the African Enterprise Challenge Fund, moderated the session, emphasizing that while solutions like solar home systems and mini-grids have proven effective, financing remains a significant constraint.

She noted the fragmented nature of distributed renewable energy projects and the challenges posed by short loan tenors and foreign exchange risks. Nigeria's pension fund assets, totaling 18 trillion naira, currently invest less than one percent in infrastructure.

Successful examples of green bond issuance in Nigeria were discussed, including projects by North South Power and CEE Solar, which relied heavily on credit enhancements. The minimum bond size set by Nigeria's Debt Management Office at 10 billion naira complicates standalone project qualification for pension fund participation.

The dialogue underscored the need for collaboration among stakeholders to unlock local capital and improve project viability.