Nigerian Green Bond Issuance to Increase with Appointment of Agusto as Auditor

The shortage of green bonds seen in Nigeria is expected to be reversed following the appointment of Augusto & Co as a licensed auditor.

Agusto & Co, the leading pan-African credit rating agency with operational offices in Nigeria, Kenya and Rwanda, is one of three companies to be certified as a Chartered Auditor by the Climate Bonds Standard Board to carry out the verification green bonds, projects and assets in Africa, the company recently announced.

“As a licensed auditor, Agusto & Co. will be able to quickly assess corporate and government (including state) projects against the Climate Bonds Standard criteria for various sectors, as we have the technical expertise and local presence,” Chief Executive Ms Yinka Adelekan said on Sunday when answering questions from The Daily Trust.

“This will facilitate the rapid adoption and issuance of green bonds by companies and government in Nigeria (and Africa) as well as the promotion of sustainable and environmentally friendly practices that align with the Development Goals (SDGs) of the United Nations and the Paris Climate Accord, of which Nigeria is a signatory,” she added.

Nigeria has not performed well in green bond issuance. To date, only the federal government and two other entities (Access Bank Plc and North-South Power Company Plc) have raised certified green bonds. Part of the challenge associated with issuing green bonds has been the lack of knowledge and the availability/access to a limited group of foreign auditors to perform an assessment of the eligibility of projects/assets/instruments under the climate bond standards, Adelekan said.

“Now that Agusto & Co has become a Chartered Auditor, we will try to bridge the knowledge gap through our advocacy and social work and ultimately support businesses and governments that have the potential to comply. to the SDGs and the Paris Climate Agreement,” Adelekan said.

As such, Agusto & Co. will be able to assess projects against the criteria of the Climate Bonds Standard for the solar, wind, marine, geothermal, bioenergy, recycling, forestry, buildings, water, waste, transport, agriculture and shipping and to issue pre-issuance and post-issuance verifier reports. Agusto & Co will provide knowledge and also act as a point of reference for rapid verification of projects in Africa, from its three operating offices – Nigeria, Kenya and Rwanda, the CEO said.

Adelekan believes Agusto & Co. will leverage its 30 years of experience in the domestic capital market, as well as its strong local presence in Nigeria, Kenya and Rwanda and strong industry skills, “to provide a support for issuers who intend to raise funds for the environment – friendly projects at a significantly lower cost than their foreign counterparts.

“Furthermore, as part of our advocacy, we will champion the development of green finance and sustainable investments in Africa as we collectively seek to save our continent from the adverse effects of climate change,” she explained.

According to Agusto, verification by an approved verifier is mandatory in the certification process. Certification is also available for bonds, loans or other debt securities that have already been issued or closed. In these cases, issuers need only meet the post-issuance requirements of the standard. Issuers can apply for certification at any time while the debt instrument is outstanding, the company explained.

In March 2019, Access Bank led the way among Nigerian lenders in green bond issuance with its N15 billion green bond, which was fully subscribed. Proceeds from the show were used to build environmental resilience, provide clean energy and support sustainable land use.

North South Power Company Limited has also issued an N8.50 billion 15.60% 15-year fixed rate senior green infrastructure bond.

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