Promoting Environmental Sustainability in Nigeria through Green Bonds

Abstract

Nigeria is one of the many African countries affected by the dangerous impacts of the activities of multinational oil corporations. These environmentally degrading activities have negative effects on the inhabitants of the country. As Nigeria relies on crude oil as its main revenue source, conversations around developing alternative means of generating energy without compromising Nigeria’s environmental health continue to grow. It is now apparent that in order to drive the course of alternative energy in Nigeria, adequate financing is required. Green bonds can provide a creative solution to this recurring environmental problem while ensuring that qualitative green projects continuously receive adequate funding. The Nigerian green finance market was therefore birthed as a result of the need to finance green projects, that is, projects designed to generate energy with the least adverse effect on the environment. However, to attract the quality of investors needed to sponsor these green projects, the Nigerian green bond market needs to gain the trust of investors. Nigeria’s green finance market must establish advanced systems that could help secure investor trust. Currently, the state of the Nigerian green bond market is not sophisticated enough to attract, let alone, retain these investors. Noting the direct impact green bonds have on the development of sustainability, and drawing inspiration from existing international practices, this thesis seeks to explore the many ways by which a more sophisticated green bond market can be developed for Nigeria and how this will impact the promotion of sustainability in Nigeria.