• Tuesday, April 16, 2024
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African Guarantee Fund covers 75% risks of green field, women-led SMEs

African Guarantee Fund covers 75% risks of green field, women-led SMEs

The African Guarantee Fund (AGF), in collaboration with the Nordic Development Fund (NDF), covers 75 percent of transaction risks for green field and women-led Small and Medium Enterprises (SMEs) in Nigeria and across Africa.

Jules Ngankam, Chief Executive Officer, AGF Group disclosed this on Tuesday the sideline of the 9th edition of the green finance conference under the theme: “The Role of Africa’s Private Sector in The Paris Agreement on Climate Change.”

The green finance conference provided a platform for all stakeholders to dialogue and showcase the many advantages that Green SMEs can contribute to the economy of Nigeria, while strengthening their understanding of AGF’s Green Guarantee Facility and how it enables banks on-lend to green and climate-smart projects.

Ngankam emphasized that the Green Finance Conference is a crucial response to the challenges posed by climate change within a framework of National Determined Contributions (NDC) with a focus on providing enhanced expertise to Africa while proposing practical solutions to addressing financing for smaller and medium-sized enterprises committed to green growth and climate-resilient development.

“Our aim is to support the banks to improve, increase or develop their green portfolios. Through the combination of our Green Guarantee and Capacity Development support, we are able to bridge the knowledge gap between both financial institutions and their customers. This is not only for the SMEs to understand how the lending process works, but also for the financial experts to learn how they can provide solutions tailored to suit the needs of the SMEs,” Jules said.

Backed by NDF’s support, AGF has been able to support financial institutions through its risk-sharing mechanism, which is crucial to incentivizing banks to provide climate finance to SMEs. NDF managing director, Satu Santala said, “We are committed to financing green and inclusive low-carbon and climate resilient growth of African economies to improve the livelihood of communities. Partnerships are at the core of NDF’s approach to climate finance and the African private sector plays a pivotal role in climate action and creating employment.”

Kenneth Opara, president of the Chartered Institute of Bankers of Nigeria, in his welcome address, noted the important role the private sector plays in climate change in the Paris Agreement, emphasizing that the private sector plays a pivotal role in unlocking new growth, job creation and sustainable agriculture.

Opara said, ‘’We hope that climate change efforts will unlock new opportunities for green growth and job creation, ranging from renewable energy and clean technology to sustainable agriculture. There are countless avenues for the private sector to get the required private solution that delivers environmental, social, and economic benefits”.

Titilayo Oshodi, special adviser to the Lagos State Government on climate change and circular economy, speaking on behalf of the Secretary to the State Government noted the need for more awareness of the effects of climate change. “It is a resultant factor in how we begin to deal with our environment, how we begin to play, what shots are required of us to keep our environment healthy, to keep it safe and climate friendly. We need to start to express the inherent opportunities in terms of wealth that are available in the wealth that we generate.”

The conference is followed by a three-day training on Green Finance for Financial Institutions with a focus on the green financing value chain, risk assessment, and regulatory requirements necessary to meet the rising demand for climate adaptation in Nigeria.