Bank Of Industry Signs £100 Million Agreement With France To Combat Climate Change In Nigeria

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Nigeria’s Bank of Industry has signed a deal valued at 100 million Euros with the French Development Agency (AfD) for the expansion of green finance in Nigeria to tackle climate change.

The deal was signed by Managing Director, BoI, Mr Olukayode Pitan and Mr Xavier Muron, Country Director, AfD in Lagos, according to the News Agency of Nigeria.

He stated the transaction was approved by AfD under its Transforming Financial Systems for Climate (TFSC) Programme with the Green Climate Fund (GCF).

The BoI Chief said the 10-year facility is priced at 2.47% per annum with a four-year moratorium by mixing various concessional resources, adding that it would focus on financing investments that contribute to climate change mitigation or adaptation.

He said, “This is the beginning of a long-term mutually beneficial relationship and a significant step for BoI as we scale up our green-lending capacity.

Bank Of Industry Signs £100 Million Agreement With France To Combat Climate Change In Nigeria

“Given the serious threat that climate change poses to equitable and sustainable development in Nigeria, it is critical for us at BoI to take the lead in mobilising capital for green and sustainable investment.”

The Country Director of AfD, Mr Xavier Muron, revealed that Nigeria was highly vulnerable to climate change with several regions likely to suffer from the effects of global warming. He said that Nigeria needs $400 billion which is between 6% to 13%of the country’s Gross Domestic Product (GDP).

He said the credit line was a key milestone towards the achievement of the Paris Agreement and was timely since Nigeria looked forward to launching its Energy Transition Plan.

“After this partnership, we hope that other financial institutions key into it as well as the needs are huge when it comes to climate change for some climate smart and friendly investments.

“As development institutions, we have to do something to help the government act, seeing that Nigeria is looking forward to implementing its net zero emissions by 2060.

“We reiterate our commitment towards climate change with the project and are proud to work with the BoI,” he said.

Muron added that the financing package would also include a 2.5 million Euro grant dedicated to a technical assistance programme aimed at mainstreaming climate finance within BoI’s strategy and operations.

“It will support capacity building for BoI and its customers, thereby providing tools for identification and development of bankable climate-related projects as well as improving the readiness of the bank’s customers to implement green practices in their operations.

“This transaction also highlights both AfD’s and BoI’s longstanding commitment to achieving the UN’s Sustainable Development Goals (SDGs).