PFAs invest N52.87bn in climate change adaptation projects

Climate change

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Chuks Udo Okonta

Pension Fund Administrators (PFAs) invested N52.87 billion in green bonds, which are focused on climate change related projects, Inspenonline reports.

Green bonds are type of debt issued by public or private institutions to fund themselves. It works like regular bond with one key difference: The money raised from investors is used exclusively to finance projects that have a positive environmental impact, such as renewable energy and green building.

According to the National Pension Commission (PenCom) the investment was made as at July 2022.

PenCom also noted pension operators directly invested N118.31 billion pension funds in the Sukuk Bond issued by the Federal Government to finance road projects nationwide in 2021.

Pension disclosed this in a document obtained by Inspenonline, noting that as
at 31 December 2021, N8.77 trillion, representing 65.35 per cent of the Assets under Management (AuM), was invested in Federal Government Securities and that out of that amount, pension funds directly invested N118.31 billion in the Sukuk Bond issued by the Federal Government to finance road projects nationwide.

PenCom stated that N14.30 billion was invested in Agency Bonds issued by the Nigeria Mortgage Refinance Company. “It is pertinent to note that all investments of pension funds by the Pension Fund Administrators (PFAs) are made in accordance with guidelines and regulations issued by the Commission and guided by the primary objectives of safety and maintenance of fair returns,” it submitted.

The pension sector regulator stated that as at July 2022, pension fund assets stood at N14.36 trillion, of which N9.05 trillion has been invested in FGN securities, while Sukuk bonds gulped N96.25 billion.

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