Climate Bonds Standard Board award Agusto & Co the Approved Verifier status

Climate Bonds Standard Board award Agusto & Co the Approved Verifier status

Agusto & Co, the leading Pan-African Credit Rating Agency with operating offices in Nigeria, Kenya and Rwanda, has become one of the three companies to be certified as an Approved Verifier by the Climate Bonds Standard Board to perform verification of green bonds, projects and assets in Africa.

As an Approved Verifier, Agusto & Co. will assess projects eligibility under the Climate Bonds Standard criteria for Solar, Wind, Marine, Geothermal, Bioenergy, Recycling, Forestry, Buildings, Water, Waste, Transport, Agriculture & Shipping sectors in Africa and issue pre-issuance and post-issuance verifier reports. As an Approved Verifier, Agusto & Co. can help companies in Africa unlock access to local and international funding options as well as promote sustainable and best environment-friendly practices that align with the United Nations Sustainable Development Goals (SDGs).

Over the last few years, Agusto & Co. has supported the development of the Nigerian Green Bond Market Development Programme in partnership with key stakeholders such as the Climate Bonds Initiative (CBI), Securities and Exchange Commission (SEC), Financial Market Dealers Quotation (FMDQ Group), Financial Sector Deepening Africa (FSD Africa) and Infrastructure Credit Guarantee Company (InfraCredit). Agusto & Co. has also issued credit ratings for the first Financial Institutions certified Green Bond in Nigeria (Access Bank Plc’s ₦15 Billion 5-Year 15.5% Fixed Rate Senior Unsecured Green Bond Due 2024) and the first corporate certified Green Bond in Nigeria (North South Power Company’s ₦8.5 Billion 15-Year 15.6% Series 1 Guaranteed Green Infrastructure Bond Due 2033).

We believe that having the benefits of domestic capital market experience, local presence coupled with a strong research and sectoral skill set to readily assess and verify green projects in Africa at a reasonable cost will be a catalyst to accelerate the development of green finance and investments in Africa.

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Contact:
Leena Fatin(link sends e-mail)

Senior Communications & Digital Manager,
Climate Bonds Initiative (London).
+44 (0) 7593 320 198

 

Agusto & Co. Media Contact: 

Head, Business Development
Agusto & Co. Limited (Lagos)
+234 1 2713808

 

About Agusto & Co. Limited: 

Agusto & Co. is the leading Pan African Credit Rating Agency and business information provider, with operating offices in Nigeria (Lagos), Kenya (Nairobi) and Rwanda (Kigali). Agusto & Co. was the first company to be granted a Credit Rating Agency license in Nigeria by the Securities and Exchange Commission and also licensed by the Capital Markets Authority in Kenya and Rwanda as a Credit Rating Agency. Over the last 30 years, we have built a strong reputation for producing credit rating opinions on some of Africa’s leading financial institutions, corporate organisations and instruments, and also has a large database on over 60 sectors across sub-Saharan Africa. Our scope of credit ratings includes financial institutions, insurance, non-bank financial institutions, corporates, funds, asset managers, sub-nationals, multilateral institutions, commercial papers, green bonds, corporate debt issues and structured products. Agusto & Co. has assigned credit ratings to Issuers (corporates and sub-national governments) and collectively they have raised over US$6 billion from the Debt Capital Markets in sub-Saharan Africa. More information on our website here.

About the Climate Bonds Initiative: The Climate Bonds Initiative is an investor-focused not-for-profit, promoting large-scale investment in a low-carbon economy. More information on our website here.

About the Climate Bonds Standard: The Standard is an overarching science-based multi-sector standard that allows investors and intermediaries to easily assess the climate credentials and environmental integrity of bonds claiming to be green and funding the low carbon future.

About Verification: Verification is an analysis-based process carried out by the Climate Bonds Standards Board approved independent organisation to assure the issuance of a climate bond, the nature of the associated low carbon projects or activities, and the associated financial accounting systems are in conformance with the Climate Bonds Standard and can gain Certification. Full list of Approved Verifiers can be found here.

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Frequently Asked Questions (Faqs) On Verification Under the Climate Bonds Standard

What role will Agusto & Co play as an Approved Verifier?

Agusto & Co. has become one of the three companies to be certified by the Climate Bonds Standard Board as an Approved Verifier to perform verification of green bonds, projects or assets in Africa.

What sectors can Agusto & Co verify projects?

Solar, Wind, Marine, Geothermal, Recycling, Bioenergy, Forestry, Buildings, Water, Waste, Transport, Agriculture & Shipping.

Any geographical coverage for projects?

Coverage is for Africa. However, the company has operating offices in Nigeria, Kenya and Rwanda.

What does verification mean?

The process by which an issuer or entity engages a Verifier to ensure their bond or projects complies with the Climate Bonds Standard and Certification Scheme.

Who is an Issuer?

The entity that wants to issue a green bond (or has green projects) and wants to highlight its green and climate-friendly credentials. This can be a private company, a listed company, a bank, a sovereign government, sub-national government, a government-related agency, etc.

What Projects and Assets are eligible for verification?

Projects, physical assets, indebtedness incurred to finance physical assets, or other related and supporting expenditures for physical assets that conform to the eligibility criteria provided in the Climate Bonds Standard.

Who is an Approved Verifier?

A third-party independent company that checks the bond or projects or assets against the Climate Bonds Standard and provide assurance to the market that it meets the requirements.

Why is the Climate Bond Standards important?

The Climate Bonds Standard and Certification Scheme provides the needed certification and allows investors, governments and other stakeholders to identify and prioritise ‘low-carbon and climate-resilient investments and avoid ‘greenwash’.

What does the Certification Mark mean?

Certification under the Climate Bonds Standard confirms that the bond, projects, assets, loan or other debt instrument is:

  • Fully aligned with the Green Bond Principles and/or the Green Loan Principles
  • The entity is using best practices for internal controls, tracking, reporting and verification
  • Financing assets consistent with achieving the goals of the Paris Climate Agreement

The Certification relates exclusively to the climate attributes of the bond, projects, assets, loan or other debt instruments, and does not address any other aspect of investment decision-making such as compliance with national or international laws and/or regulations, broader Environment, Social and Governance (ESG) attributes, or creditworthiness.

 Does the Certification include the credit rating of the bond?

The Certification Scheme is not involved with the financial credit rating of the bond or instrument.

Are there fees involved in the Verification and Certification?

Yes, Climate Bonds issuers will pay a fee for verification of their claims (to be determined by the Approved Verifier) and then for certification to the Climate Bonds Standard.

Can Issuers work with the verifiers to identify the best projects from a pool of projects to assign funds to?

Yes. The question will be whether they fit the stated eligibility criteria; the Verifier’s task is to check that the nominated projects comply with the published criteria.

What are the benefits of Verification to the Issuer?

  • Diversify investment base: certification signals the low-carbon integrity of the projects and is important for investors looking for climate-related investments
  • Reputation: associates the organisation with efforts to scale up financial flows for delivering the low-carbon economy.
  • Costs: remove cost to investor of environmental due diligence.

Is Verification compulsory?

Verification by an Approved Verifier is mandatory in the Certification process. Certification is also available for bonds, loans or other debt instruments which have already been issued or closed. In these cases, issuers only need to meet the Post Issuance Requirements of the Standard. Issuers can apply for Certification at any time while the debt instrument is outstanding.

Is Verification the same as a Second Opinion?
A Climate Bonds Certified Bond has been checked with a standardised and transparent methodology that is aligned with the Paris Climate Agreement goals and is more rigorous than a Second Opinion.

What is an Assurance Report?

This is a document prepared by an Approved Verifier that conveys the Verifier’s conclusion or opinion as to whether the debt instrument (or projects) has conformed to the relevant requirements of the Climate Bonds Standard.

What is a Pre-issuance Verification?

This is the “first half” of the Verification process, which happens before the debt issuance. This may take from a couple of weeks up to a few months, depending on the complexity of the bond or assets. The Issuer engages an Approved Verifier, who will guide the issuer through the process of Certification and if necessary, help them identify which projects and assets are eligible. The Verifier will then complete a ‘Pre-issuance Verification report for the Climate Bonds Standard Board to review and understand whether the bond is eligible for Certification.

What is a Post-issuance Verification?

The “second half” of the Verification process happens after the debt issuance. This is simpler and generally a quick check to see that the Issuer has followed its plans and allocated the funds appropriately as stated in the Pre issuance verification. The Issuer engages the same Verifier as before and a report is produced within 12 months of the bond issuance.

Does Verification involve on-site and technical verifications of the assets?

Whether on-site procedures are required in the Verification engagement is up to the Verifier based on their assessment of the risks. Depending on the complexities of the transaction, it might require the Verifier engaging a third party who has the technical skills to support the verification process.

How long does the whole Certification process take?

This varies between Issuers and depends on the complexity of their bonds, projects or assets, their internal structures and processes and other factors. Typically, the whole process would take from about two weeks up to several months; with most taking around one to two months.

What type of debt instruments can be certified under the Climate Bonds Standard?

Use of Proceeds Bond Loan Facility, Bilateral Loan & Syndicated loan
Revenue Bond Commercial Paper
Project Bond Debt Instruments issued by a Green Bond Fund
Securitised Bond Green Deposits
Convertible Bonds or Notes Revolving Credit Facilities & Export Credit Facilities
Sukuk Other Debt Instruments

More details on eligible instruments can be found on: https://www.climatebonds.net/certification/eligible-instruments

United Nations SDGs that align with Green Bonds certified under the Climate Bonds Standard

 

 

Finance & Leasing

COMPANY RATING EXPIRY OUTLOOK COUNTRY
Credit Direct Limited review in progress Aug 31 , 2022 Stable Nigeria

Corporates

COMPANY RATING EXPIRY OUTLOOK COUNTRY
No Current Ratings

Corporate Bonds

COMPANY RATING EXPIRY OUTLOOK COUNTRY
Viathan Funding Plc.’s ₦10 billion 10-year Series 1 Senior Guaranteed Fixed Rate Bond Due 2027 Aaa Dec 31 , 2027 Stable Nigeria
NSP-SPV PowerCorp Plc’s ₦10 Billion 15-year Series 1 Aaa Dec 31 , 2033 Stable Nigeria