NSE, LuxSE sign MoU to partner on sustainable finance

The Nigerian Stock Exchange (NSE) and the Luxembourg Stock Exchange (LuxSE) have recently signed a Memorandum of Understanding (MoU) to collaborate on promoting cross-listings and trading of green bonds in Nigeria and Luxembourg. This partnership was formalized on the sidelines of the annual meeting of the World Federation of Exchanges (WFE) in Singapore. Jude Chiemeka, Head of Trading Business Division at NSE, shared details on how this deal will impact the Nigerian capital market. Chiemeka emphasized the significance of this partnership, stating that the LuxSE serves as the gateway to international finance. By working with LuxSE, Nigerian companies issuing green bonds will gain access to a broader pool of international investors, ultimately enhancing their visibility in the global financial market. LuxSE's commitment to sustainable financial securities is demonstrated by its extensive listing of over 29,000 bonds from 3,000 issuers across more than 100 countries. One of the key aspects of the collaboration is the facilitation of cross-listing for Nigerian companies that have issued green bonds. This will enable these companies to attract investments from international investors who are interested in supporting sustainable projects. Chiemeka highlighted that institutions like the European Investment Bank are willing to invest in green bonds issued by Nigerian banks, indicating a growing interest in sustainable finance. The Nigerian Stock Exchange has been actively involved in developing the green bond market in the country since 2016. The NSE played a pivotal role in facilitating the issuance of the first sovereign green bond by Nigeria, amounting to 10.96 billion with a five-year maturity and a return rate of 13.48%. This milestone made Nigeria the first African country and one of the first globally to issue a sovereign green bond. The NSE continues to provide support and guidance to issuers in navigating the green bond market. The reception from Nigerian investors towards sustainable finance has been positive, with companies like Northside Power and Access Bank issuing green bonds worth billions. The government is also exploring green bonds as a means to finance eco-friendly projects and address budget deficits. With the recent MoU with LuxSE, the green bond market in Nigeria is expected to gain more traction and attract a wider range of corporate and government issuers. In terms of commitment to driving the green bond market, the NSE is focusing on supporting both issuers and investors. The Exchange is dedicated to providing guidance to issuers on the issuance process and assisting them in reaching a larger investor base. Additionally, the NSE's X Academy offers training and educational programs to enhance understanding of green bonds among investors, further promoting market development. The collaboration between NSE and LuxSE represents a significant step towards deepening the capital markets in Nigeria and fostering sustainable finance. By leveraging LuxSE's international platform and expertise in sustainable financial securities, Nigerian companies are poised to expand their access to global capital and promote environmentally responsible investments.