The Bank of Industry (BOI) and the French Development Agency (AFD) announced a partnership for a €100 million credit line to expand green finance in Nigeria.
AFD approved the transaction as part of its Transforming Financial Systems for Climate (TFSC) Program with the Green Climate Fund (GCF). The TFSC is a $650 million program developed in 17 countries for projects involving 100% climate investment. By combining various concessional resources, the 10-year facility is attractively priced at 2.47 percent per year with a 4-year moratorium.
The credit facility will prioritize investments that contribute to climate change mitigation or adaptation, such as renewable energy, low carbon and efficient energy generation, climate-smart agriculture technologies, clean urban transportation, and others.
“This is the start of a long-term mutually beneficial relationship, as well as a significant step forward for BOI as we expand our green lending capacity.” Given the grave threat that climate change poses to Nigeria’s equitable and sustainable development. “It is critical for us at BOI to take the lead in mobilizing capital for green and sustainable investment,” said Mr. Olukayode Pitan, Managing Director/Chief Executive Officer of Bank of Industry, at the credit agreement signing ceremony held at the BOI head office in Lagos.
Mr. Xavier Muron, Country Director for AFD, emphasized the significance of such a project in the global fight against climate change. He went on to say that the new credit line is a critical step toward achieving the Paris Agreement. This program is timely because Nigeria is about to launch its Energy Transition Plan.
“As part of the financing package, a €2.5 million grant facility will be dedicated to a technical assistance program aimed at mainstreaming Climate Finance into BOI’s strategy and operations.” It will help BOI and its customers build capacity by providing tools for the effective identification and development of eligible bankable climate-related projects, as well as improving the bank’s customers’ readiness to implement green practices in their operations.
“This transaction also demonstrates AFD and BOI’s long-standing commitment to achieving the United Nations’ Sustainable Development Goals” (SDGs). “BOI operates under a strong Environment and Social Governance (ESG) framework, which has been integrated into its operations through a monitoring and reporting system,” he explained.
