Lagos seeks approval for N200bn bond to fund rail expansion
Lagos State has asked lawmakers to approve a N200 billion bond to finance major rail and healthcare infrastructure, offering fixed-income investors a new entry into Nigeria's most active subnational debt programme.
The Lagos State Government has requested legislative backing to issue a N200 billion Series V bond, part of a broader N1 trillion debt and hybrid instruments programme. Commissioner for Finance Abayomi Oluyomi presented the request to the State House of Assembly on Tuesday, seeking funds for priority capital projects. Speaker Mudashiru Obasa has referred the proposal to joint budget and finance committees, which are expected to report their findings on Thursday.
Proceeds are earmarked for critical transport and health infrastructure, most notably further expansion of the Lagos Rail Mass Transit network. The financing would also support the construction of the New Massey Children’s Hospital, the Lagos Island General Hospital and the Omu Creek Bridge.
Alongside the bond issuance, Oluyomi asked the assembly to approve Lagos State’s participation in the Federation Account Allocation Committee (FAAC) Receivables Discounting Programme. This mechanism would leverage future federal allocations to unlock roughly $17 million in immediate third-party funding for capital projects. Participation requires a formal legislative resolution.
For domestic fixed-income investors, the Series V issuance represents another tranche from Nigeria’s most prolific subnational borrower. Lagos became the first local government in the country to access the domestic capital market with a N15 billion floating-rate bond in 2002. The state has since issued multiple series, including N80 billion in 2012, N87.5 billion in 2017 and N137.3 billion in 2020, with all previous debt either fully repaid or currently performing.
The fresh capital injection comes as Lagos accelerates an aggressive overhaul of its urban transport network. The state is actively extending the operational Blue and Red rail lines while preparing to build the 68-kilometre Green Line to the Lekki Free Zone. The Green Line alone is estimated to cost $3 billion and is being developed in partnership with the Ministry of Finance Incorporated and China Harbour Engineering Company.
The federal government has committed N146.14 billion in counterpart funding for the Green Line in its 2025 budget, with another N102.3 billion proposed for 2026. These rail corridors are central to the Lagos Strategic Transport Master Plan, which has scaled up from six to 11 rail lines and one monorail to tackle severe road congestion across the metropolis.
