The Bank of Industry, BOI has signed a deal worth €100 million with the French Development Agency, AFD to tackle climate change in Nigeria. The deal will enhance the expansion of green financé in Nigeria, the News Agency of Nigeria, NAN said.
The Managing Director of BOI, Olukayode Pitan who signed on behalf of the federal government disclosed that the transaction was approved by AFD under its Transforming Financial Systems for Climate, TFSC Programme with the Green Climate Fund, GCF. Xavier Muron, the Country Director of AFD signed on behalf of the French government
According to Pitan, the 10-year facility has an interest rate of 2.47 percent with four years moratorium, noting that the loan will be invested in areas that mitigate climate change.
He 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 mobilising capital for green and sustainable investment.”
The Country Director of AfD, Xavier Muron, revealed that Nigeria was highly vulnerable to climate change with several regions likely to suffer from the effects of global warming. He said that Nigeria needs $400 billion which is between six percent to 13 percent of the country’s Gross Domestic Product, GDP.
He explained that the French government will partner with Nigeria in her effort to end gas emissions by the year 2060, adding that another 2.5 million Euro grant will be provided in the area of technical assistance to assist BOI in climate change financing and strategy.
“After this partnership, we hope that other financial institutions key into it as well as the needs are huge when it comes to climate change for some climate smart and friendly investments.
“As development institutions, we have to do something to help the government act, seeing that Nigeria is looking forward to implementing its net zero emissions by 2060.
“We reiterate our commitment towards climate change with the project and are proud to work with the BoI,” he said.
“It will support capacity building for BoI and its customers, thereby providing tools for identification and development of 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 (SDGs).
The deal came less than a year after the French government promised to invest $70 million in renewable energy projects in Nigeria.
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