BOI, AFD sign agreement to fight Climate Change in Nigeria

The Bank of Industry (BOI) and the French Development Agency (AFD) have signed a grant agreement for €2.5 million, delegated by the Green Climate Fund (GCF), to boost their partnership to fight climate change in Nigeria.

France has committed more than €1.5 billion to the Green Climate Fund since 2019 and on 23rd August 2022, BOI and AFD signed a €100 million credit line for the expansion of green finance in Nigeria. This was approved under AFD’s Transforming Financial Systems for Climate (TFSC) Programme with the Green Climate Fund (GCF), a $650 million programme developed in 17 countries for 100 per cent climate investment projects.

The TFSC Programme focuses on financing investments that contribute to climate change mitigation or adaptation; specifically projects focused on renewable energy, low carbon and efficient energy generation, climate-smart agriculture technologies, clean urban transportation and others.

The grant agreement, which was signed at a meeting at the French Embassy under the primary patronage of the French Ambassador to Nigeria and ECOWAS, Emmanuelle Blatmann, sets up a technical assistance scheme for BoI. Both signatories acknowledge the importance of mainstreaming Climate Finance within BOI’s strategy and operations.

The objective is to build the capacity of BoI, thereby providing tools for the effective identification and development of eligible bankable climate-related projects as well as improving the readiness of the bank’s customers to implement green practices in their operations.

The implementation of the Environment and Social Governance framework provided for in the credit agreement, therefore, becomes an important part of the technical assistant mandate.

“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. In addition to the line of credit, the €2.5 million Technical Assistance funds will support capacity building for BOI and its customers, thereby enabling the scaling of current efforts by BOI towards climate change mitigation and adaptation. This will contribute significantly to reducing Nigeria’s carbon footprint.

“With specific reference to Gender Equality, the technical assistance will support BOI in the development and implementation of professional gender equality and gender lens investing policies,” said Olukayode Pitan, Managing Director/Chief Executive Officer, Bank of Industry, at the grant agreement signing ceremony.

Bearing in mind the Paris Agreement, Xavier Muron, country director for AFD, recognised BoI’s commitment to embedding sustainability in its business practices to drive strategic social, economic and environmental impact in the communities the bank serves. Needless to say that for BoI, a key financial actor supporting the country’s goal to reach carbon neutrality, having strong technical assistance to build its climate finance strategy is paramount.

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Mr Pitan acknowledged the dedication of AFD, the GCF and its strategic partners to ensure a smooth and efficient implementation of this deal: “BOI welcomes its partnership with the AFD and GCF as it continues to implement President Muhammadu Buhari’s policies with respect to climate finance. We commend the professional approach adopted by these partners in delivering this technical assistance package. We are confident it will enhance BOI and its customers’ capacity and readiness for climate finance. We believe this is the beginning of a long and mutually beneficial relationship.”

Mr Muron appreciated the strong relationship BoI and AFD have been building and looked forward to further supporting the BoI in its activities towards achieving the SDGs.