Bank of Industry signs £100m deal with France to tackle climate change in Nigeria

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The Bank of Industry of Nigeria has signed an agreement worth €100 million with the French Development Agency (AfD) for the expansion of green finance in Nigeria to combat climate change.

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

He said the transaction was approved by the AfD as part of its Transforming Financial Systems for Climate (TFSC) program with the Green Climate Fund (GCF).

What the BoI says

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

He said, “This is the start of a long-term, mutually beneficial relationship and an important milestone for BoI as we increase our green lending capacity.

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

AfD Country Director, 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 Nigeria needed $400 billion, or between 6 and 13 percent of the country’s gross domestic product (GDP).

He said the line of credit was a key step towards achieving the Paris Agreement and was timely as Nigeria looked forward to the launch of its energy transition plan.

The news continues after this announcement

  • After this partnership, we hope that other financial institutions will join in, as well as the climate change needs are huge for some climate-smart and climate-friendly investments.
  • “As development institutions, we need to do something to help the government act as Nigeria is eager to implement its net zero emissions by 2060.
  • “We reiterate our commitment to climate change with the project and are proud to work with the BoI,” he said.
  • Muron added that the the funding package would also include a €2.5 million grant dedicated to a technical assistance program aimed at mainstreaming climate finance as part of BoI’s strategy and operations.
  • It will support capacity building for the BoI and its clients, thereby providing tools for the identification and development of bankable climate-related projects as well as improving the readiness of the bank’s clients to implement practices. green in their operations.
  • “This transaction also underlines the long-standing commitment of the AfD and the BoI to achieving the United Nations Sustainable Development Goals (SDGs).

What you should know

  • Reminder Nairametrics reported last year that the French government, through the French Development Agency/Agence Française de Développement (AFD), has agreed to invest $70 million in renewable energy projects in Nigeria.
  • This was revealed by Mr. Chukwudumije Igwe, Member, Project and Structured Finance, Sub Sahara Africa, Access Bank, during the Nigeria Sustainable Use of Natural Resources and Energy Finance (SUNREF) Program Investor Conference on Thursday in Lagos.
  • This month, InfraCredit, a specialist AAA (NG) rated infrastructure credit guarantee institution in Nigeria and Agence Française de Développement (AFD), the French government’s development agency and lead implementing agency official development assistance from France, have signed a technical assistance financing agreement.
  • Under the latter, AFD will provide technical assistance in project preparation and development for InfraCredit’s potential pipeline of public-private partnership (PPP) projects in selected state governments that need support. support to improve their bankability and attract private sector participation. Thus, this will allow them to reach financial close and access long-term financing in local currency in the national debt capital markets.