Lagos seeks N200b to finance new rail line, bridge, hospitals

The Lagos State Government has launched a new capital raising of up to N200 billion to finance priority infrastructure projects across the state as the government seeks to widen access to healthcare and multi-modal mobility.

The book building for the new capital raising, the fifth series under the state’s N1 trillion debt and hybrid instruments issuance programme, is expected to close this weekend, with a focus on long-term capital with a tenor of 10 years.

Official documents indicated that the Lagos State Government Series 5 N200 billion Bond proposes annual coupon or interest rates of between 16.50 per cent and 16.75 per cent, payable twice a year. The minimum subscription is 5,000 units of N1,000 each, totaling N5 million with multiples of N1,000 thereafter.

The net proceeds from the new bond issue would be used to finance ongoing hospital constructions under the Ministry of Health, development of Lagos Metropolitan Area Transport Authority’s Blue Line and construction works on Omu Creek Bridge among others.

In November 2025, Lagos had made history as the first African subnational to issue a green bond with its N14.815 billion 5-Year 16.00 per cent Fixed Rate Series 3 Green Bond 2030. It also issued a N230 billion 10-Year 16.25 per cent Series 4 Conventional Bond 2035. The two bonds totaling N245 billion were issued under the N1 trillion hybrid debt programme. Bids for the two bonds had totaled N338 billion.

Analysts at Arthur Steven Asset Management said the latest N200 billion bond issuance was an attractive long-term instrument citing Lagos’ financial profile and ratings.

“Lagos State is Nigeria’s commercial and economic hub, with a diverse and resilient economy contributing approximately 20 per cent of the national gross domestic product (GDP).

“LASG has consistently demonstrated strong growth in internally generated revenue (IGR), supported by a broad tax base, and limited dependence on federal transfers and allocation. The State has averaged an IGR-to-total revenue ratio above 68 per cent in the past three years.

“LASG also continues to lead in advancing and implementing the National Sustainable Development Goals (SDGs). With a strong focus on infrastructure development, LASG is fostering economic growth and strengthening its financial capacity, enabling it to attract further capital” Arthur Steven stated.

Analysts noted that Lagos State was rated Aa- by Agusto & Co and AA by GCR.

According to analysts, the ratings reflected the state’s robust and well diversified economy, which supports strong internally generated revenue and financial autonomy with limited reliance on federal transfers.

“The assigned ratings are further supported by LASG’s acceptable expenditure structure, characterised by sustained capital investments in infrastructure and social services, alongside effective control of recurrent costs. In addition, the ratings are upheld by the state’s strong capacity to meet financial obligations promptly, underpinned by its good cash-generating profile and sustained access to funding lines from the domestic capital market and financial institutions,” Arthur Steven Asset Management stated.

Lagos State Governor, Mr. Babajide Sanwo-Olu has said the net proceeds from the N1 trillion hybrid programme would be used to expand critical infrastructure in key sectors such as transportation, housing, environmental sustainability, healthcare, and education, all aimed at driving sustainable and inclusive growth in the state.

He noted that overwhelming oversubscription to the previous issuances underlined investors’ confidence in the governance and economy of the state.

He pointed out that since the commencement of his administration, the state has been setting new records in bond issuance, with the first bond issued in 2020, valued at some N110 billion setting a record at the time and subsequent bond surpassing its predecessor.

According to him, the issuances serve as testaments to the vision, governance, and fiscal discipline that are hallmarks of the state administration.

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