Impact Policy Tracker Policy

Nigeria's Green Bond III



Nigeria has been a pioneer of the issuance of sovereign green bonds in Africa. It became the first country on the continent to issue a sovereign green bond in 2017, as part of its strategy to meet its Nationally Determined Contributions (NDCs). Since this inaugural issuance, the Federal Government of Nigeria (FGN), through the Debt Management Office (DMO), has issued a total of three sovereign green bonds - in 2017, 2019, and 2025.

The most recent issuance (Green Bond III), closed in June 2025, sought to raise NGN 50 billion (~USD 34.1 million) and attracted subscriptions of NGN 91.42 billion (~USD 62.3 million), representing a 183% oversubscription. Proceeds from Nigeria’s sovereign green bonds are earmarked exclusively for the financing or refinancing of eligible green projects, selected by the Federal Ministry of Environment in coordination with relevant sector ministries and agencies. Funded projects span climate change mitigation and adaptation initiatives, clean energy and transport infrastructure, water resource management, afforestation, and sustainable agriculture.

Highlights

  • First Mover in Africa: Nigeria issued the continent’s first sovereign green bond in 2017, setting a precedent for African sovereign participation in the global green bond market. Nigeria’s early leadership subsequently inspired sovereign thematic issuances in countries such as Seychelles, Côte d’Ivoire, and South Africa, reinforcing its role as a regional reference in sovereign sustainable finance. This leadership also inspired action at the subnational level, as evidenced by the Series III Green Bond issued by Lagos State - the country’s maiden environmental sustainability bond and the first to be issued by any subnational government in Nigeria.

  • Building Confidence Through Robust Frameworks: Nigeria’s sovereign green bond programme is underpinned by two relevant frameworks: the Green Bond Framework (2020) and the Sustainable Bond Framework (2025). While Nigeria does not yet have a formal sustainable taxonomy in place, this case illustrates how well-designed thematic bond frameworks can effectively guide capital allocation.

Government’s Role:
Market Participant


Country:
Nigeria

Policy Type:
Sustainable Bonds

Year: 2025

Responsible Institution:
Federal Government of Nigeria

Additional information:
Sustainable Finance in Africa: Growth Opportunities and Leading Practices
Debt Management Office Nigeria; Green Bond III Investor Presentation

Sustainable Bonds

What are Sustainable Bonds?

Within the set of financial instruments that fall under the impact investing umbrella, Green, Social, Sustainability, Transition, Blue, Gender and Sustainability-Linked bonds (often collectively referred to as GSS+, ESG, thematic, labelled or sustainable bonds) have gained prominence in recent years for their potential to help bridge the SDG financing gap. Governments, especially in emerging economies, play a catalytic and pivotal role in scaling these instruments. By issuing sustainable bonds, national, regional, and local public entities mobilise capital for long-term investments with broad social and economic benefits, which often fall outside the scope of conventional, profit-driven financing.

Public issuers are not only large players in terms of volume, representing approximately 50% of sustainable bond issuances annually since 2020, but also critical market enablers. Government-led issuances serve as signals of policy commitment to sustainability, helping to build investor confidence and drive demand from both domestic and international capital markets. Moreover, public sector issuances typically align with international standards and best practices, such as the ICMA principles, thereby setting a benchmark for transparency, impact reporting, and accountability. This leadership lowers the perceived risk for other issuers and facilitates replication by subnational governments, state-owned enterprises, and even private entities. Thanks in part to these public sector efforts, the sustainable bond market continues to grow rapidly. In 2025, issuance of sustainable bonds is projected to reach USD 1 trillion, accounting for 11% of the global bond market, a milestone that reflects both rising investor appetite and the enabling role played by governments in expanding this segment of sustainable finance.

For more information on sustainable bonds and their market trends, visit S&P Ratings “Sustainable Bond Outlook 2025”, Sustainable Fitch “Sustainable Finance Outlook 2025”