Nigeria Moves To Unlock Local Capital For Carbon Markets, Climate Investments 

The engagement, themed : “Unlocking Domestic Finance for Carbon Markets,” was convened under the Policy and Regulatory Innovations for Scaling Markets (PRISM) Nigeria Project, an initiative designed to create an enabling policy and regulatory environment for carbon-linked revenues to become a credible and investable asset class.

The PRISM Nigeria Initiative seeks to support financing for clean cooking, distributed renewable energy (DRE) and nature-based projects across the country by strengthening the connection between carbon markets and Nigeria’s financial ecosystem.

The project is implemented by the Clean Cooking Alliance (CCA) in partnership with the Nigeria Off-Grid Market Acceleration Programme (NoMAP) and the Global Off-Grid Solar Association (GOGLA), in collaboration with the Office of the Senior Special Assistant to the President on Climate Finance and Stakeholder Engagement and the Nigerian Alliance for Clean Cookstoves in Kenya.

Speaking during the workshop, Mr Ibrahim Shelleng, Senior Special Assistant to the President on Climate Finance and Stakeholder Engagement, described the initiative as timely, stressing that Nigeria must transition from years of policy development to practical implementation of climate finance strategies.

Shelleng said climate finance should not be viewed solely as international funding, but as any financial resources, whether domestic or global, directed towards climate mitigation and adaptation.

He emphasised the importance of mobilising local capital to drive Nigeria’s climate agenda.

“Domestic finance brings ownership, and it brings speed. Our communities cannot wait two to three years for international validation processes; we must look inward to raise the finance our climate projects need,” he said.

Also speaking, Michael Ivenso, Director of Energy, Transportation and Infrastructure at the National Council on Climate Change (NCCC), highlighted the importance of domestic finance and regulatory reforms in accelerating Nigeria’s clean cooking transition.

Ivenso described carbon markets as a major opportunity to mobilise funding for the sector, noting that they have the potential to positively impact about 45 million people by 2030.

He explained that while carbon credits represent an important source of alternative financing, they must be structured as recognised tradable financial instruments to attract investment.

The NCCC official stressed the need for stronger participation by domestic financial institutions, adding that development finance institutions would play a critical role in supporting the growth of Nigeria’s carbon market.

He also highlighted the importance of the Letter of Authorisation (LoA) as a sovereign instrument that enables the monetisation of carbon assets.

According to him, Nigeria has issued 25 Letters of Authorisation since May, representing a significant milestone in strengthening the country’s carbon market framework.

Ivenso further stressed that a credible monitoring, reporting and verification (MRV) system would be essential to maintaining the integrity of carbon assets and building investor confidence.

Through research, regulatory mapping across Nigeria and Kenya, and extensive stakeholder engagement, PRISM Nigeria identified 15 priority regulatory interventions targeting key financial regulators, including the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), National Insurance Commission (NAICOM) and National Pension Commission (PenCom).

The proposed reforms are grouped under three key pillars: establishing stable carbon market infrastructure; expanding market participation and financial integration; and ensuring financial stability and risk mitigation.

During a technical session, stakeholders prioritised four major interventions for further consideration. They include the incubation of carbon credit-linked bond instruments, incentives for loans supporting carbon credit-related projects, integration of carbon credit data into climate risk databases, and inclusion of carbon credits in environmental, social and governance (ESG) and climate disclosures.

The workshop concluded with a call for stronger data systems to support decision-making and market growth.

Mr Rajeev Gupta of the Clean Cooking Alliance stressed that reliable data would be critical to developing Nigeria’s carbon finance ecosystem.

“Nigeria needs more consistent data flowing through this system. Without good data, there’s no clear picture. Without a clear picture, there’s no informed decision-making. And without that, there’s no real growth in the clean cooking and carbon finance space,” Gupta said.

Stakeholders at the event agreed that strengthening regulatory frameworks, improving data availability and encouraging domestic investment would be crucial to unlocking the full potential of Nigeria’s carbon markets.