The Bank of Industry (BoI) and the French Development Agency (AFD) have signed a €2.5 million grant agreement delegated by the Green Climate Fund (GCF) to fight climate change in Nigeria.
The grant agreement, which set up a technical assistance scheme for BoI, is designed to build the capacity of the bank, according to a statement on Sunday.
It said it would provide tools for effective identification and development of eligible bankable climate-related projects as well as improve the readiness of the bank’s customers to implement green practices in their operations.
“In this context, the implementation of the Environment and Social Governance framework provided for in the credit agreement will be an essential part of the technical assistant mandate,” the statement said.
On August 23, 2022, the BoI and the French agency signed a €100 million credit line to expand green finance in Nigeria.
“This was approved under AFD’s Transforming Financial Systems for Climate (TFSC) programme with the Green Climate Fund, a $650 million program developed in 17 countries for 100 per cent climate investment projects,” the statement said.
According to the statement, 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.
“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 mobilizing capital for green and sustainable investment,” Olukayode Pitan, managing director/chief executive officer, BoI, said at the grant agreement signing ceremony.
“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.”
Pitan said that with specific reference to gender equality, the technical assistant will support BoI in developing and implementing professional gender equality and gender lens investing policies.
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Bearing in mind the Paris Agreement, Xavier Muron, country director of AFD, recognised BoI’s commitment to embed sustainability in its business practices to drive strategic social, economic and environmental impact in the communities the bank serves.
Pitan acknowledged the dedication of AFD, the GCF and its strategic partners to ensure this deal’s smooth and efficient implementation.
He said, “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 begins a long and mutually beneficial relationship.”
Meanwhile, Muron appreciated the strong relationship BoI and AFD have built and looks forward to further supporting the BoI in its activities towards achieving the SDGs.
