FMDQ Launches Africa First Green Exchange

As part of its objectives to unlock sustainable capital and help redirect capital flows towards sustainable investment projects that will help mitigate against the negative impacts of global warming and climate change, FMDQ, Nigeria's foremost securities exchange company, has launched not only Nigeria's but Africa's first green exchange securities company in Lagos, Nigeria.

With this feat, FMDQ aims to be a leader in the area of social bonds, green bonds, sustainable development bonds, and other environmentally friendly financings that will help preserve our environment thereby helping corporations and governments in Africa transition into more environmentally friendly economic and financial activities.

FMDQ and LGX(Luxembourg Green Exchange) which is the first green exchange in the world with over 36,000 securities, 2,500 issuers, and over 100 separate participating countries, of which LGX represents over 50% of the trillion-dollar green bond market. Hence with this strategic partnership FMDQ hopes to drive the needed but required capital inflow towards private and public investment projects that reduces harmful economic activities that injure the environment.

To understand the importance of this launch, it is imperative that readers understand what green exchanges are. Green exchanges are the platform for connecting issuers of climate finance instruments, stocks, and bonds issued by companies that are committed to the principles of environmental sustainability that should minimize the negative impact on the planet.

As the world transition into green, trillions of dollars will be needed to invest in this transition. It is estimated that over $10trillion will be needed to aid this transition. As worldwide financial and government regulations are enacted specific green securities will be used for climate transition from carbon energy to green energy. The selected financial instruments will eliminate "greenwashing" as specified ESG metrics and transparency are applied to each financial instrument.

The Luxembourg Green Exchange (LGX) is the world's largest platform dedicated to sustainable finance. With over 36,000 securities, 2,500 issues, and over 100 separate countries, the LGX represents over 50% of the trillion-dollar green bond market.

A green bond is a fixed income financial instrument designed to support climate-related or environmental projects. The green bond is also known as a climate bond used to access finance and deliver impacts against verified standards.

FMDQ with the official launch hopes to provide the needed strategic platform to encourage sustainability, credibility, and transparency in the world's drive towards addressing global warming.

Subsequently, this collaboration of FMDQ and LGX hopes to drive the needed capital inflow towards sustainable ecologically financing.

Furthermore, by the agreement between FMDQ and LGX, the two institutions would work together to allow Nigeria issuers whose securities are listed on the FMDQ exchange to access the international community of investors by offering them a secondary listing location on the FMDQ exchange.

FMDQ with this launching also hopes to provide a technical platform for prospective exchanges in Africa especially in countries with more technologically developed exchanges such as South Africa, Egypt a template to establish similar in their countries.

At the virtual event held jointly between the Luxembourg Stock Exchange and FMDQ securities, LuxSE CEO Julie Becker noted that cooperation between the global capital markets is crucial, and partnership is needed for developing countries to mitigate and adapt to climate change.

"I would like to congratulate FMDQ Exchange on the launch of the FMDQ green exchange and I look forward to further exploring new fields of cooperation in the area of green finance," Becker said.

Also speaking at the 26th United Nations Climate Change Conference of the Parties (COP26) event, the Governor of Lagos State, Babajide Sanwo-Olu who was represented by his special adviser on Sustainable Development Goals (SDGs) and Investment, Solace Hammond said that the launch of green exchange was a step in the right direction for mainstreaming finance and development in Africa and is a huge win for Nigeria especially as it is happening in this period of COP26.

The Governor of Lagos State stated that the launch of the green exchange would open up options especially unlocking sustainable investment opportunities for investors.

FMDQ with this launching hopes to open up a more than one billion dollars’ investment in sustainable financing in Nigeria and Africa in general. With this launching, green bonds, social bonds, environmental, social, and governance fixed income financial securities should unearth, expand, and harness hidden potentials in industries that preserve the environment and still provide economic and financial opportunities for investors, operators, and governments.

Also speaking on the development, the Chief Executive Officer, FMDQ Group, Bola Onadele, expressed that the group recognizes the strategic but critically important role it plays in the Nigerian financial market.

According to the CEO, this includes the opportunities its business represents in its ability to promote sustainable economic growth and development and as such understands that delivery of long-term business success, value creation and prosperity are not only hinged on financial but also on environmental and social performance.

The MD, FMDQ, Tumi Eskimo speaking in an exclusive interview highlighted the driving motivation for sustainable financing to come from its guiding core values of teamwork and collaboration, innovation, integrity, and value-adding made introducing green exchange a natural transition to promoting sustainable green growth via finance a seamless direction. 

The FMDQ green exchange will provide information and relevant data on green and sustainable finance and securities, to issuers and investors.

As part of its achievements, Timi Sekomi stated that the Federal Government green bonds, access bank green bond and North-South power limited infrastructure bond are some of the issuers in the FMDQ green exchange.