Nigeria’s Green Bond Borrowing Jumps by N47bn

Nigeria’s borrowing through green bonds grew by N47.36bn in one year, reflecting the Federal Government’s gradual shift toward climate-linked financing.

Data from the Debt Management Office (DMO) showed that green bond stock rose from N15bn in December 2024 to N62.36bn by December 2025, one of the fastest growth rates among domestic debt instruments.

Although still small compared to total borrowing, green bonds increased from 0.02% of domestic debt in 2024 to 0.08% in 2025, while overall domestic debt climbed from N70.41tn to N80.49tn.

The government’s Sustainable Bond Framework, issued in March 2025, underpins the issuance of green, social, and sustainability bonds. It prioritises projects in renewable energy, sustainable agriculture, clean transport, and climate adaptation.

The framework states: “Sustainable Bonds will raise funds exclusively for spending on Eligible Projects… which should have clear environmental and/or social benefits and promote the transition to low-carbon and climate-resilient growth.”

Oversight mechanisms require proceeds to be ring-fenced, held in dedicated accounts, and disbursed only to approved projects. Ministries must submit quarterly reports, with misapplication of funds leading to suspension of utilisation.

Minister of Environment Balarabe Lawal announced plans to raise N500bn in green bonds in 2026, saying proceeds would support climate change mitigation, renewable energy, and environmental protection.

He added: “This shows our commitment to expanding climate financing options and reducing reliance on oil revenues and conventional borrowing.”

Nigeria’s sustainable bond programme, first introduced in 2017, aligns with international standards such as the ICMA Green Bond Principles, with external verification by independent reviewers.