Lagos raises N244.82bn through green, conventional bonds

Lagos State government has announced plans to channel the proceeds from its recent bond issuance, totaling N244.82 billion, into critical infrastructure development.  The funds will be invested in key sectors such as transportation, housing, environmental sustainability, healthcare, and education, aiming to drive sustainable and inclusive growth in the state. This was stated at the Lagos […]

Lagos State government has announced plans to channel the proceeds from its recent bond issuance, totaling N244.82 billion, into critical infrastructure development. 

The funds will be invested in key sectors such as transportation, housing, environmental sustainability, healthcare, and education, aiming to drive sustainable and inclusive growth in the state.

This was stated at the Lagos State Government Ministry of Finance/DMO bond signing ceremony held yesterday in Lagos. it was attended by government officials, financial institutions, and investors. 

Lagos State Governor, Babajide Sanwo-Olu expressed gratitude to investors for their confidence in Lagos State and pledged to ensure prudent management of public resources.

He said, “We are here to finalize the documentation for the issuance of our Green Bond and Conventional Bond as part of the Lagos State N1 trillion Debt and Hybrid Instruments Issuance Programme.”

According to him, since his administration took office, its journey in bond issuance has been pioneering. 

“The first bond we issued in 2020, valued at approximately N100 to N110 billion, marked a record at the time.

Sanwo-Olu stated that “Lagos State has issued Nigeria’s first subnational Green Bond, securing N14.815 billion. The enthusiastic response, with total bids reaching N29.29 billion to N27.79 billion of which were within the advised price guidance, affirms our vision for environmental responsibility aligned with the second pillar of our THEMES+ Agenda and our long-term goal of constructing a Lagos that is prosperous, resilient, and environmentally secure for future generations.”

He added that “our Series 4 Conventional Bond aimed for N200 billion, yet at the conclusion of the book build, we received an impressive N310.06 billion in bids, with N304 billion within the advised range. This extraordinary investor confidence prompted us to exercise the Green issuance option, allowing us to successfully raise N230 billion.

“This issuance now stands as the largest bond issuance in Lagos State’s history and indeed for any subnational government in Nigeria. It serves as a testament to the vision, governance, and fiscal discipline present within Lagos State. We deeply value this trust and are wholly committed to honoring it.”

The Commissioner of Finance for Lagos State, Abayomi Oluyomi noted that the comprehensive project selection process for this bond reflects government’s determination to finance initiatives that resonate with the United Nations Sustainable Development Goals (SDGs) and produce measurable environmental benefits. 

He explained that “the impressive issuance of the Series 4 Conventional Bond. Initially targeting N200 billion, Lagos State successfully raised N230 billion. This oversubscription underscores strong investor confidence, despite regulatory thresholds that limited the ultimate size of the issuance. 

“With a benchmark now approaching N300 billion and potentially reaching N500 billion in the future, we are optimistic that upcoming issuances will continue to attract robust market interest.”

CEO, Chapel Hill Denham, the lead issuer, Bolaji Balogun, stated that while many states in Nigeria face challenges in issuing bonds due to transparency and compliance issues, Lagos stands out as a beacon of best practices and innovation.

He noted that “this N230 billion issuance marks not only the largest ever by a sub-national entity in Nigeria but also the most substantial issuance by any entity, aside from the national government. Furthermore, being the first sub-national in Africa to issue a Green Bond is a remarkable milestone.”

Temilola Akinrinade, representing the Deputy High Commissioner and Nigeria Finance & Investment Mobilisation Lead at the British High Commission disclosed that Lagos has successfully completed a significant dual bond issuance, demonstrating strong investor confidence in the state’s governance and economic reforms initiated by Nigeria’s President.