Nigeria’s borrowing through green bonds rose by N47.36bn within one year, highlighting a gradual shift by the Federal Government towards climate-linked financing as it seeks to diversify funding sources and support sustainable development.
Green bonds are debt instruments issued by governments, companies, or financial institutions to raise money specifically for environmentally friendly projects.
They work like regular bonds: investors lend money to the issuer and receive interest payments over time, while the principal is repaid at maturity.
The difference is that the funds must be used for projects with environmental or climate benefits. Data obtained from the Debt Management Office showed that the Federal Government’s green bond stock increased from N15bn as of December 31, 2024, to N62.36bn by December 31, 2025.
The N47.36bn increase represents one of the fastest growth rates among Nigeria’s domestic debt instruments, although green bonds still account for a small fraction of total borrowing. Figures from the DMO indicated that green bonds made up just 0.02 per cent of total domestic debt in 2024, rising to 0.08 per cent in 2025.
