Lagos State has cemented its position as Nigeria’s most creditworthy subnational issuer after successfully raising a historic N244.82 billion through two heavily oversubscribed bond tranches, including Africa’s first-ever state-level green bond.
The dual issuance comprising a N14.82 billion 5-year Series 3 Green Bond at 16.00% and a N230 billion 10-year Series 4 Conventional Bond at 16.25% was concluded on Thursday under the state’s N1 trillion Debt and Hybrid Instruments Issuance Programme.
Total investor orders reached N338 billion, representing a subscription rate of nearly 70% above the initial target and prompting the state to exercise a greenshoe option on the larger conventional tranche.
Speaking at the transaction signing ceremony, Governor Babajide Sanwo-Olu described the outcome as “a resounding vote of confidence in the vision, governance and fiscal discipline of Lagos State.”
“The Series 4 bond is now the single largest issuance ever by any subnational entity in Nigeria,” the governor said. “Every bond we have floated since 2020 has broken the previous record. Today we have done it again — and added the landmark of issuing Nigeria’s first subnational green bond.”
Pioneering Green Finance in Africa
The N14.82 billion green bond, maturing in 2030, attracted bids of N29.29 billion. Proceeds will finance climate-aligned projects such as solar power installations in public schools, sustainable transport initiatives and resilient infrastructure, all certified by the Climate Bonds Initiative and backed by an independent second-party opinion.
Commissioner for Finance, Abayomi Oluyomi, emphasised that every project financed by the green bond had undergone rigorous screening to ensure measurable environmental impact and full alignment with the UN Sustainable Development Goals.
**Infrastructure Push Drives Demand**
Funds from the larger N230 billion conventional bond will support an extensive pipeline of projects, including:
– Major highway expansions and road rehabilitation
– Construction of a new 280-bed specialist hospital
– Affordable housing schemes
– Agro-processing hubs to bolster food security
– Upgrades to education and healthcare facilities
The overwhelming investor response — with qualified bids on the conventional bond alone topping N304 billion underscores growing market trust in Lagos State’s ability to deliver on its ambitious THEMES+ development agenda while maintaining strong debt-service discipline.
Lagos has a long track record of successful capital-market raises, dating back to its pioneering N30 million revenue bond in 1987. Subsequent issuances in 2002, 2008, 2010, 2012 and 2013 progressively scaled up in size and sophistication, with several also oversubscribed.
Market sources say the latest transaction sends a powerful signal to both domestic and international investors that Lagos remains the safest and most attractive subnational credit in Nigeria, even in a high interest-rate environment.
With demand far outstripping supply, analysts expect the state’s next outing under the N1 trillion programme to be significantly larger whenever it returns to the market.
