• Saturday, July 13, 2024
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BoI, AFD join forces to fight climate change in Nigeria

A little realism injected into the debate on climate change

The Bank of Industry (BoI) and French Development Agency (AFD) have announced that they built a partnership for a 100 million euro credit line for the expansion of green finance in Nigeria.

The transaction was approved by AFD under its Transforming Financial Systems for Climate programme (TFSC) with the green climate fund. The TFSC is a $650 million programme developed in 17 countries for 100 percent climate investment projects. The 10-year facility is attractively priced at 2.47 percent per annum with a 4-year moratorium by mixing various concessional resources, according to a statement.

The credit facility will focus 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.

At the credit agreement signing ceremony at the BoI head office in Lagos, Olukayode Pitan, managing director/chief executive officer, BoI, said, “This is the beginning of a long-term mutually beneficial relationship and a significant step for BoI as we scale up our green-lending capacity.

“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.”

Pitan acknowledged the dedication of AFD and its strategic partners to ensure the consummation of this deal. “This is the first time we have worked with AFD, and we were impressed by how the AFD invested significant time and effort to structure the facility to our specific requirements and operating model. This is a strong foundation for a long-term partnership,” he said.

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Xavier Muron, country director for AFD, highlighted the importance of such a project in the framework of the fight against climate change globally.

He described the new credit line as a key milestone towards the achievement of the Paris Agreement. “This programme is timely since Nigeria is looking forward to launching its energy transition plan,” he said.

The financing package will also include a 2.5 million euro grant facility dedicated to a technical assistance program aimed at mainstreaming climate finance within BoI’s strategy and operations, according to the statement.

It said it would support capacity building for BoI and its customers, 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.

“This transaction also highlights both AFD’s and BOI’s longstanding commitment to achieving the UN’s sustainable development goals. BOI operates under a robust Environment and Social Governance framework that has been integrated into its operations with a monitoring and reporting system,” the statement added.