The Federal Government, through the Bank of Industry (BoI), plans to implement an on-lending financing scheme to support the adoption of clean energy solutions in the country. This was disclosed by the MD/CEO of the financial institution, Dr. Olasupo Olusi, at the ongoing AADFI-ADFIAP Joint CEO Forum in Abuja on November 9, 2021. Olusi noted the need to ensure that institutions are resilient enough to attract affordable long-term finance through which green projects can be implemented.
Olusi added that the bank is very active in resourcing climate-friendly funds, including the recent credit line of 100 million Euros secured from the French Development Agency (AFD) for the expansion of green finance in Nigeria. He stated that the bank is also currently implementing an on-lending financing scheme through local financial institutions to support customers interested in adopting clean energy solutions. “We will continue to seek funding partners to complement our climate change agenda,” he said.
Climate change has significant effects on economic growth.
It is globally recognised that there is an opportunity for climate change mitigation and adaptation to become a primary driver of economic growth, and development finance institutions (DFI) can become the vehicles for this change. In his welcoming remark, Olusi noted the significant effects of climate change, stressing the role of development finance institutions. He acknowledged that this is a world where climatic events are claiming lives, disrupting food systems, limiting infrastructure, and generally slowing down economic growth and development across member nations; while accelerating poverty, to the detriment of mankind.
Because of that, the Bank of Industry is an integral actor in the global response to the climate challenge given the strategic role DFIs play in mobilizing resources for national development. “As Nigeria’s leading DFI, one of the primary drivers of BoI developmental strategy is to accelerate Nigeria’s development through supporting environmentally friendly and sustainable projects across the key sectors of the economy,” he stated. He also disclosed that the BoI project portfolio reflects a significant investment in renewable energy projects. The banks seek to contribute to the continental ambition of 27% of renewable power generation by 2030.
Phasing out kerosene was part of the net-zero plan.
In the last five years, BOI has worked with our partners to raise over $5 billion from several international financial institutions. “We intend to leverage our extensive partnership to raise the resources required for building a climate-smart Nigeria in line with our president’s vision,” the BoI boss said. Since former president Muhammadu Buhari signed the Paris Climate Change Agreement, which is aimed at reducing “GreenHouse Gas Emissions unconditionally by 20 percent and conditionally by 45 percent,” the country has been committed to achieving net-zero carbon emissions.
Part of the initiative of the Federal Government towards this is the phasing out of kerosene. This was after the Federal Government of Nigeria launched its Energy Transition Plan on August 24, 2022. The plan, which was chaired by former vice president Yemi Osinbajo, was tailored to guide the country towards the twin objective of achieving universal access to energy by 2030 and a carbon-neutral energy system by 2060. As part of the plan to achieve the climate target by 2060, the Federal Government announced its readiness to junk kerosene consumption by 2030. Critics saw this as a milestone and it is expected that Nigeria will have been fully penetrated by gas by 2030.
Joint forum covers 33 countries across four continents.
While AADFI stands for Association of African Development Finance Institutions, ADFIAP stands for Association of Development Financing Institutions in Asia & the Pacific. Being an NGO in consultative status with the United Nations’ Economic and Social Council, ADFIAP is the focal point of all development banks and other financial institutions engaged in the financing of development in the Asia-Pacific region. Its mission is to advance sustainable development through its members. The joint AADFI-ADFIAP forum gathers development finance institutions from Africa, Asia, and the Pacific, covering 33 countries across four continents.