BusinessDay

Bank Of Industry gets €100m credit to mitigate climate change

...promote low emmission transition

The Bank of Industry (BOI) said it has accessed a €100m line of credit under the Transforming Financial Systems for Climate (TFSC) programme of French Development Agency (AFD), being implemented in collaboration with the Green Climate Fund (GCF).

The Managing Director, BOI, Olukayode Pitan said this in Abuja during the 2nd Regional Roundtable on creating sustainable development financial institutions organised by Africa Association of Development Finance Institutions.

Pitan, who is also the Chairman of the Association of Nigerian Development Finance Institutions said the €100m line of credit would be channelled towards financing investments that contribute to mitigation and adaptation measures to climate change, toward promoting low-emission transition in Nigeria.

According to him, the Bank also has access to the $600m Global Environment Fund (GEF)/ Resource Efficiency and Cleaner Production (RECP) credit guarantee scheme that would support it in financing the procurement of plant and machinery for projects that would promote industrial energy efficiency.

He said, “Through our strategic partnership with the French Development Agency (AFD), we have accessed a €100m line of credit under the Transforming Financial Systems for Climate (TFSC) programme of the agency, in collaboration with the Green Climate Fund (GCF).

“This fund shall be channelled towards financing investments that contribute mitigation and adaptation measures to climate change, toward promoting low-emission transition in Nigeria.

“In addition to the above, we also have access to the $600 Million Global Environment Fund (GEF)/ Resource Efficiency and Cleaner Production (RECP) credit guarantee scheme that would support us in financing the procurement of plant and machinery for projects that would promote industrial energy efficiency.”

According to Pitan, one of the primary pillars of the developmental strategy at the Bank is to accelerate the industrialization of the Nigerian economy by providing financial and business support services to environmentally-friendly and sustainable projects across key sectors of the economy.

Read also: Experts say climate risk to rise over next 5 years

In this regard, the BOI MD said the bank set up a full-fledged Environmental & Social Governance team in 2019, which manages its sustainability strategy and activities.

“In 2013 the Bank set up a group that supports renewable energy projects, through this structure, it went into partnership with UNIDO, funded and commissioned six mini-grid power solutions to provide solar energy to six rural communities across the six geo-political zones.

“For over eight years since the projects were commissioned, the benefitting communities have been enjoying 24-hour uninterrupted green power supply,” he said.

He told the gathering that the Bank has also integrated the Environmental and Social Management System (ESMS) framework into its end-to-end credit appraisal, approval, disbursement and credit monitoring activities.

“In our continued effort to build a sustainable institution, the bank concluded a
€1bn syndicated loan transaction in August 2022, which brought the total funds that we have raised from the international financial markets since 2018 to about $5bn.

“This will enable us to deepen our impact in key growth and emerging sectors of the economy, given the critical role that they play in national socio-economic development.

“The assessment of our sustainability status contributed to the success of the deal; from credit ratings to active compliance with best practices”, he said.

The Chairman of AADFI, Thambo Thamane said that the objective of the meeting was to promote economic and social development in Africa through cooperation among financial institutions and development partners across the globe.

He said the regional round table of operating sustainable DFIs is being organized with the European Organization for Sustainable Development, adding that ADFI has worked for almost a decade on sustainability agenda for developing and finance institutions.

He said, “BOI is a proud member of AADFI and has demonstrated leadership in participating and other African DFIs will tend to learn from this.

“The SDGs, federal government and other countries development agendas cannot be achieved without sustainable financial institutions.

“The Golden rules of DFIs is in the quest of achieving our desired developmental goals are well implemented or documented and the development financial scheme has gone through different metamorphosis over the past decades. This is not only in Africa but across the globe.”

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