The FMDQ Group on Monday launched Africa’s first green exchange known as the FMDQ Green Exchange to promote economic development through green and sustainable financing.
The Chief Executive Officer, FMDQ Group, Mr Bola Onadele said in his welcome address at the hybrid launch ceremony held on Monday in Lagos.
Onadele said that the biggest risk facing the world was climate change, which had made sustainable financing vital to economic sustainability.
“With climate change becoming one of the biggest risk facing the world today and in recognition of a greater need to promote economic development in nigeria through green and sustainable finance, FMDQ Group considers it pertinent to launch the green exchange initiative.
“The first in Africa to provide an information platform dedicated to promoting transparency, good governance and the growth of green and sustainable finance in the Nigerian financial market.
“The launch of the FMDQ Green Exchange is a milestone which will contribute to the not just Nigeria but Africa’s achievement in our endeavours towards achieving the global climate goals defined in the Paris Climate agreement and in the UN’s SDGs.
“FMDQ Group recognized the imperative role it plays in the Nigerian financial market and the opportunities its business represents in its ability to promote sustainable economic growth and development.
“As such, understands that the delivery of long-term business success, value creation and prosperity is not only hinged on financial but also environmental and social performance.
“It is in accordance with this, that FMDQ group, through its subsidiaries has continued to take the lead in championing green and sustainable finances in the Nigerian financial markets,” he said.
Onadele appreciated the Lagos State Government for its commitment to the green and sustainable finance drive in Lagos State and Nigeria.
According to him, FMDQ is working with key stakeholders in the financial market ecosystem to set up the Financial Centre for Sustainability Lagos, making FC4SL the 24th global network in May 2019.
He commended the Federal Government of Nigeria, Access Bank and North South Power Limited as the pioneer issuers of green bond in Nigeria in total of N55 billion.
The Lagos State Governor, Mr Babajide Sanwo-Olu in his address said that green, blue and sustainable financing can help address climate change effects.
The governor, who was represented by the Special Adviser on Sustainable Development Growth (SDGs) and Investment, Ms Solape Hammond, said that the launch was a good step in the right direction for mainstreaming financing in Nigeria and Africa.
According to Sanwo-Olu, Nigeria has committed to the SDGs, to achieve this and other lofty goals, funding is required in excess of what the public sector can generate and the reason why mobilisation of private capital was important.
He said the world’s first green bond was issued by the World Bank in 2008 and has continued to grow, but the Green Exchange in Luxenbourg was not created until 2016.
Sanwo-Olu added that Luxembourg Stock Exchange (LuxSE) had since become the world’s leading platform for sustainable securities issuing about 50 per cent of green securities in a total of 32 currencies and as of August 2019, displayed 796 green, social and sustainable securities totaling $696 billion.
“Nigeria has committed to the SDGs, to achieve this and other lofty goals, funding is required in excess of what the public sector can generate.
“Public funding alone cannot suffice and private capital needs to be mobilised to reach the objectives in the Paris Climate Agreement and the UN SDGs.
“The financial sector will therefore play a vital role in accelerating the local markets ability to provide the required support,” he said.
According to him, FMDQ is creating and embracing the opportunities inherent in expanding green, blue and other social sustainability funding options as alternative sources of finance for projects and assets not just in Lagos State but across the Africa.
Sanwo-Olu said that Lagos generated in excess of 14 million metric tons of wastes annually estimated to be about 11 tons per day, comprising mostly of plastics, liquid and organic wastes out of which 65 per cent ends up in the biggest dump site at Olusosun, Ikeja.
He said: “The Olusosun dump site is due for closure in another three years while the other dump sites do not have as much capacity and are at the verge of closure.
“so there is room for expansion and to address the issue head-on.
“Also, with the growing population, the state government is saddled with not only delivering on economic growth but mitigating against adverse effects on climate change and waste generation, being one of the top 10 low line cities of the world.
“Green, blue and other social and sustainable bonds can help address the challenges presented by climate change effects,” he noted.
The Director-General, Debt Management Office (DMO), Mrs Patience Oniha in her goodwill message said that the DMO has been associated with FMDQ from inception and is impressed with the he progress achieved so far, in the areas of innovation, price discovery among others
Oniha said for DMO’s commitment to deepening the domestic market, the launch demonstrated the responsiveness of FMDQ to revolution in the international and local market environment as well as the need of investors and issuers.
According to her, with the global changes in climate, it means everyone has a role to play and the speed at which governments are addressing climate change or ESG is becoming faster and commitments are made.
“Not only issuers who now have needs or government’s in our case who have needs to finance in a sustainable manner but it has extended to investors and for us, that is a critical issue and speaks to why we need an exchange that us dedicated to green securities,” she said.
Oniha said it was heart-warming to note that some international bodies have budgeted funds to invest in green projects, adding that the trend and futures showed that there will be an increase in the demand of funds to finance such projects.
She also added that government had the intention to issue securities that comply with the requirements to address green projects which will increase activities in the domestic green bonds market in the market in 2022.