Green Finance In Nigeria: 2025 In Review And Outlook For 2026

Nigeria continues to face increasing pressure to balance economic development, rapid population growth, and environmental sustainability. One consequence of rising economic activity is the steady increase in greenhouse gas (“GHG”) emissions, which calls for coordinated mitigation efforts across both public and private sectors. Green finance has therefore become a strategic mechanism for directing capital toward climate-aligned projects, reflecting both domestic priorities and global momentum for sustainability and climate action.

Green finance is now central to Nigeria's pursuit of a resilient and low-carbon economy, consistent with its Energy Transition Plan and its commitment to achieve Net-Zero emissions by 2060. In 2025, Nigeria witnessed notable progress driven by policy advancements, the issuance of green and sustainability themed bonds by both public and private sectors, and increased participation from domestic and international investors. At the same time, regulatory evolution and macroeconomic challenges continue to shape the scale and pace of the market.

This article reviews the defining developments of 2025 and outlines the trends expected to influence Nigeria's green finance landscape in 2026. It highlights regulatory shifts, market activity, and emerging opportunities that will shape the next phase of green investment in the country.

Nigeria's Evolving Green Finance Ecosystem

Nigeria's green finance architecture has expanded steadily over the past decade, driven by collaborative efforts among government institutions, financial regulators, and private entities.

Key milestones include Africa's first sovereign green bond issuance by the Federal Government of Nigeria (“FGN”) in 2017¹, followed by multiple regulatory initiatives to institutionalise sustainability within the financial sector. Subsequently, the FGN issued a second sovereign green bond valued at ₦15 billion in June 2019, which was oversubscribed and financed 23 climate-aligned projects across multiple Nationally Determined Contribution (NDC) sectors². Most recently, in 2025, the FGN issued a third sovereign green bond of ₦50 billion to finance renewable energy, clean transportation, sustainable water management, and climate adaptation initiatives.

Key frameworks include: 

1. The SEC Green Bond Rules (2018)
   The Securities and Exchange Commission (“SEC”) introduced comprehensive rules governing green bond issuances in Nigeria. Although the rules primarily address bonds, their underlying principles, including project eligibility, verification, management of proceeds, and impact reporting, also guide the structuring of green loans and related financing instruments.
2. The Federal Ministry of Environment Green Bond Framework (2018)
   Issued jointly with the Ministry of Finance and Debt Management Office, the Framework provides guidance to issuers and investors on aligning green bonds with Nigeria's climate priorities, including the Nationally Determined Contributions under the Paris Agreement.
3. The Climate Change Act (2021)
   The Act establishes Nigeria's overarching climate governance framework and affirms the country's commitment to achieve Net-Zero emissions between 2050 and 2070. It requires integration of climate considerations into national planning and mandates robust reporting and compliance obligations for climate-related projects, thereby creating a more structured environment for green investment.
   Projects financed under green finance frameworks will need to align with Nigeria's carbon budget and climate action priorities. Borrowers will, for instance, be required to demonstrate regulatory compliance, appoint climate officers where mandated, and maintain robust reporting processes.
   Moreover, alignment with the Act can enhance access to incentives from the Climate Change Fund or other market-based mechanisms, such as emissions trading, while also mitigating legal and reputational risks. In this way, the Act not only establishes the compliance baseline for climate related projects but also shapes strategic opportunities for sustainable debt financing in Nigeria.
   

Review of 2025

2025 marked a consolidation phase for Nigeria's green finance market as issuers, regulators, and investors responded to growing demand for climate-aligned capital. Some key highlights are outlined below:

1. Green Bond Issuances: Federal Government, Lagos State, and Private Sector
   
   1. The Federal Government Green Bond Issuance
      The FGN strengthened its leadership in the space with the successful issuance of the Series III Sovereign Green Bond in June 2025, valued at ₦50 billion. The transaction was strongly received, attracting ₦91.42 billion in subscriptions (183% oversubscription) and ultimately allotting ₦47.36 billion at a coupon rate of 18.95% for a 5-year tenor. Proceeds from this issuance will finance green projects, assets, and expenditures which align with the 2025 Sustainable Bond Framework³.
      
   2. The Lagos State Government Bond Programme
      The Lagos State advanced subnational green financing with its 2025 announcement of a ₦214.8 billion Bond Programme, which includes a Series III ₦14.815 billion Green Bond—the State's maiden environmental sustainability bond and the first subnational green bond issuance in Nigeria. The issuance is expected to support sustainable urban infrastructure, climate-resilient transport systems, and environmental management projects across the State. This bond was issued in November 2025 and was oversubscribed by 97.7% (₦29.29 billion)⁴.
      
   3. Private Sector and Corporate Green/Sustainability Bonds
      Private-sector participation expanded in 2025 as corporates explored sustainability-aligned instruments to finance clean energy, waste-to-wealth, and efficiency projects. Examples include:
      
      • North South Power Company Limited, which continued activities under its ₦50 billion Green Bond Programme following earlier series raised for hydropower expansion.
      • Access Holdings Plc, which has advanced preparations for additional sustainability-linked issuances to support renewable energy and low-carbon lending portfolios.
      • Other Infrastructure-focused entities, including Infrastructure Credit Guarantee Company Limited and CEESOLAR Energy Limited⁵, explored green debt instruments to finance distributed renewable energy assets, energy-efficient industrial upgrades, and water infrastructure⁶.
   These developments signal growing issuer confidence and the emergence of a more diverse green-bond market that is no longer solely government-driven.
   
   
2. Expansion of Climate-Aligned Public Support
   Development finance institutions deepened support for climate-aligned lending. A major highlight was the launch of the Green Guarantee Company (“GGC”), the world's first dedicated climate finance guarantee institution, backed by partners including the NSIA, FCDO, Green Climate Fund, USAID, and Norfund⁷. With an initial capitalisation of USD 100 million, GGC aims to unlock up to USD 1 billion in guarantees for green bonds and loans across emerging markets.
   
3. Bank of Industry – FSD Africa MOU
   In January 2025, the Bank of Industry (“BOI”) entered a strategic partnership with FSD Africa to strengthen its climate-finance capability, develop decarbonisation pathways, and expand its adaptation-finance programmes⁸.
   

To view the full article click here.

Footnotes

1. Green Finance Platform, “Nigeria has issued a USD 29.7 Million Green Bond” https://www.greenfinanceplatform.org/policies-and-regulations/nigeria-has-issued-usd-297-million-green-bond.  

2. “Green Bond III Investor Presentation” https://www.dmo.gov.ng/fgn-bonds/green-bond/5338-fgn-series-iii-green-bond-investor presentation/file  

3. “Sovereign Green Bond Series III Offer for Subscription” https://www.dmo.gov.ng/fgn-bonds/green-bond/5339-sovereign-green-bond-series-iii-offer-for-subscription 

4. “Investors Oversubscribe Lagos N14.8bn Green Bond by 97.7%” https://businesspost.ng/economy/investors-oversubscribe-lagos-n14-8bn-green-bond-by-97-7/ 

5. “InfraCredit's Guarantee, supported by UK-Funded Climate Finance Blending Facility, mobilises Local Currency Debt for CEESOLAR's Off-Grid Energy Project in Nigeria” https://infracredit.ng/infracredits-guarantee-supported-by-uk-funded-climate-finance-blending-facility-mobilises-local-currency-debt-for-ceesolars-off-grid-energy-project-in-nigeria/ 

6. “Infracredit's Guarantee Supports Green Liquified Natural Gas Limited (GLNG)'S Issuance Of NGN11.85 Billion 10-Year Senior Guaranteed Fixed-Rate Series II Infrastructure Bonds Due 2035” https://infracredit.ng/infracredits-guarantee-supports-green-liqui fied-natural-gas-limited-glngs-issuance-of-ngn11-85-billion-10-year-senior-guaranteed-fixed-rate-series-ii-infrastructure-bonds due-2035/

7. “Launch of the Green Guarantee Company to Mobilise Billions in Climate Financing” https://nsia.com.ng/launch-of-green-guarantee-company-to-mobilise-billions-in-climate-financing/ 

8. Bank of Industry, “Bank of Industry and FSD Africa collaborate to drive Green Finance Initiatives in Nigeria” https://fsdafrica.org/wp-content/uploads/2025/01/BOI-FSD-AFRICA-PRESS-RELEASE.pdf 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.