NIGERIA – The French Development Agency (AFD) is set to provide with a €100 million line of credit under the Transforming Financial Systems for Climate (TFSC) program to the Bank of Industry (BOI) to support its green finance.
BOI is the largest development finance institution currently operating in Nigeria, with over €4 billion in assets by 2021.
The funds will contribute to the adaptation and resilience to climate change in Nigeria.
This US$650 million program is being implemented in 17 countries to support 100% climate investment projects in the framework of a partnership between AFD and the Green Climate Fund (GCF).
In Nigeria, AFD believes that its collaboration with BOI will contribute to climate change mitigation and adaptation, notably through projects focusing on renewable and low-carbon energy, energy efficiency, smart agricultural technologies, clean urban transport, etc.
In order to support BOI in financing these sustainable development projects, AFD also plans to provide a €2.5 million grant for a technical assistance program to mainstream green finance into BOI’s strategy and operations.
This programme will build capacity for BOI and its clients through the provision of tools for the identification and development of bankable climate projects and support for the bank’s clients’ readiness to implement “green” practices.
“This is the beginning of a mutually beneficial long-term relationship and an important step for BOI as we increase our climate lending capabilities,” said Olukayode Pitan, BOI’s managing director.
“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 investments.”
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 US$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.
Last year, The French Government, through the French Development Agency/Agence Francaise de Developpement (AFD), agreed to invest US$70 million into renewable energy projects in Nigeria.
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