BoI Targets Climate-friendly Investments In Nigeria With €100m

The Bank of Industry (BoI) has accessed a €100million line of credit under the Transforming Financial Systems for Climate (TFSC) programme of the agency, in collaboration with the Green Climate Fund (GCF). 

The Bank said the line of credit would be channeled towards financing investments that contribute to mitigation and adaptation measures to climate change, toward promoting low-emission transition in Nigeria.

Managing director, BoI, Olukayode Pitan, dropped this hint at the 2nd Regional Roundtable on Creating World Class Sustainable Development Financial Institutions through embracing holistic sustainability which was organised by the Africa Association of Development Finance Institutions (AADFI) in Abuja on Monday, and attended by the chairman of AADFI, Mr. Thambo Thamane; secretary general of AADFI, Cyril Okoye, and Patricia Ojangole of the Ugandan Development Bank, and chairman of the International Council of Sustainability Standards and CEO, European Organisation for Sustainable Development (EOSD), Mr. Arshad Rab, among other top officials.

He also disclosed that the Bank has access to the $600million 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.

According to him, since the Sustainable Development Goals (SDGs) were launched, there have been concerted efforts globally, to ensure that ‘sustainability’ is advertised and sold to the world not for profit, but to ensure that sustainability is achieved with active and unwavering commitment from all stakeholders in the global ecosystem.

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

In the light of this, the BoI MD explained that the bank had set up a full-fledged Environmental & Social Governance team in 2019, which manages its sustainability strategy and activities.

Pitan said in 2013 the Bank set up a group that supports renewable energy projects, noting that 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.

He explained that for over eight years since the projects were commissioned, the benefitting communities have been enjoying 24-hour uninterrupted green power supply.

He said 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 addition, he continued, BoI last year commenced the registration processes toward obtaining the Sustainability Standards and Certification Initiative (SSCI) accreditation.

“In our continued effort to build a sustainable institution, the bank concluded a

€1billion syndicated loan transaction in August 2022, which brought the total funds that we have raised from the international financial markets since 2018 to about $5billion.

“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.

“Through our strategic partnership with the French Development Agency (AFD), we have also 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 channeled 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,” he said.