Access Bank Green Bond: Banking on in-house Competence and International Frameworks
Kenya Bankers Association
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Abstract: When Access Bank listed its Green Bond on the Nigerian Stock Exchange in March, 2019, it was a major milestone for the country’s financial and capital markets. At that time, the Nigerian green bond market was still in its nascent stages, with the only issuer prior to this being the Federal Government of Nigeria (FGN). The Access Bank Green Bond was thus the first such issue by the private sector in that country. The Access Bank Green Bond is a 15 Billion Naira (about $41 million), five-year, 15.5 percent fixed rate Senior Unsecured Green Bond, due in 2024. The issue, which was oversubscribed, is to finance projects largely in water infrastructure, solar power generation and flood mitigation. The projects’ eligibility for funding was evaluated and determined through standards developed by the globally recognized certifier Climate Bonds Initiative (CBI) and the bank’s own Green Bond Framework. This process of evaluation identified some 11 sectors that benefited from funding. These include renewable energy, energy efficiency, efficient green buildings, sustainable waste management, sustainable land use and clean transportation. Other sectors are sustainable water management, climate change adaptation, green trade, climate-smart agriculture and non-energy GHG emission reduction. Being the country’s first corporate Green Bond, this issue was crafted without the benefit of prior experience to benchmark with. Naturally, there was a paucity of extant governing regulations and the issue presented regulatory bodies with a steep learning curve. This was also the experience of the consultants who worked on the project. As happens in most emerging markets where Green Bonds have been issued, regulations had to follow the product, when it came to some aspects. As a workaround, Access Bank relied heavily on global frameworks and its own internally-developed governance infrastructure to guide the issuance.