THE Federal Government on Friday announced plans to replace an existing debt obligation with another debt obligation under different terms (Refinance) of up to N3.6 trillion local debt this year,  according to Debt Management Office (DMO).

Under this new obligation (Refinance) it would include N1.3 trillion worth Federal Government Bond and N2.452 Trillion in Treasury Bills.

Patience Oniha, DMO Director-General announced this at a press meeting on Friday in Abuja.

She said, “The federal government would pitch its borrowings for the year around the regular FGN, savings and sukuk bonds and may consider green bonds ‘’if the conditions are right”.

Green Bonds are any type of bond instrument where the proceeds are exclusively applied to finance or refinance, in part or in full, new and/or existing eligible green projects that align with the four core components of the Green Bond Principles (GBP).

Recall that the green bond listed N10.69 billion on the Nigerian Stock Exchange 5-year, Federal Government Sovereign Green Bond at coupon rate of 13.48 per cent on 20 July, 2018 and a good number of investors subscribed to it even known its was the first time such kind of bond would be listed.

The sukuk bond too was a success when it was launched initially which help in finishing up uncompleted road projects in the country, so the federal government has said its plans to launch a third phase of the sukuk bonds hopes to raise up to N150 billion to enable it fund 44 road projects in the country. According to the director-general the two phase of the sukuk bond came at N100 billion each and did very well.

With the refinancing of N3.6 trillion local debt, proceeds can help fix the most of the abandoned projects in the country, which would save Nigeria from taking more loans.

Already there is a deficit of N2.175 trillion, which the government plans to fund part through external borrowings, which is a burden on the country.