Lagos State Launches Major Bond Offerings to Drive Infrastructure and Sustainability
The Lagos State government has initiated the book building process for two significant bond offerings: a N200 billion Series IV Bond and a N14.815 billion Series III Green Bond. These are part of the state’s broader N1 trillion Debt and Hybrid Instruments Issuance Programme, designed to enhance infrastructure financing and promote climate-resilient development.
The offers were launched on November 6, 2025, and will close on November 13, 2025. The Joint Issuing House, Afrinvest Securities Limited, released the details of these issuances, which represent the largest combined offering in the state’s history. Both bonds are structured as fixed-rate instruments with semi-annual coupon payments, to be repaid on an amortized basis following a 24-month moratorium period.
Funding Priority Projects and Climate Initiatives
The N200 billion Series IV Bond is intended to finance key physical and social infrastructure projects across Lagos. Meanwhile, the N14.815 billion Green Bond, the state’s first sustainability-focused issuance, will support climate-resilient and environmentally sustainable initiatives. These projects align with the Lagos State Climate Action Plan (2021-2025), focusing on flood mitigation, drainage systems, renewable energy installations, sustainable waste and water management, and urban greening efforts.
The Green Bond adheres to the International Capital Market Association’s (ICMA) Green Bond Principles (2021). It has also been certified by the Climate Bonds Initiative (CBI) and received a Second-Party Opinion from Agusto & Co., confirming its compliance with global sustainability standards.
Economic Strength and Fiscal Management
Lagos State, Nigeria’s economic hub and largest subnational economy, contributes approximately 20 percent of the country’s GDP. Its strong revenue performance is evident in the rise of internally generated revenue (IGR), which increased by 105 percent to about N2 trillion as of December 31, 2024. This growth reflects the state’s efficient tax administration and reduced dependence on federal allocations.
Both bond tranches are supported by an Irrevocable Standing Payment Order (ISPO) and a Consolidated Debt Service Account (CDSA) funded from the state’s IGR. This structure ensures timely payments and provides investor protection.
Credit Ratings and Investment Appeal
Lagos State maintains strong credit ratings: Aa- from Agusto & Co. and AA- from GCR. These ratings highlight the state’s diversified economy, prudent fiscal management, and consistent investment in infrastructure and social development. They also reflect the government’s effective control over recurrent expenditure and its ability to meet debt obligations as they come due.
Pricing and Subscription Details
Under the terms of the offer, the Series IV Bond is priced between 16.15 and 16.25 per cent for a 10-year tenor. The Series III Green Bond is priced between 15.90 and 16.00 per cent for a 5-year tenor. The minimum subscription for each offer is N10 million (10,000 units at N1,000 per unit), with additional multiples of N1 million thereafter.
Upon completion, both instruments will be listed on the Nigerian Exchange Limited (NGX) and/or the FMDQ Securities Exchange Limited.