The Bank of Industry (BOI) and the French Development Agency (AFD) have announce that they built a partnership for a €100mn credit-line for the expansion of green finance in Nigeria.
The transaction was approved by AFD under its Transforming Financial Systems for Climate (TFSC) Program with the Green Climate Fund (GCF). The TFSC is a $650million-Program developed in 17 countries for 100 per cent climate investment projects. The 10-year facility is attractively priced at 2.47 per cent per annum with a 4-year moratorium by mixing various concessional resources.
The credit facility will focus on financing investments that contribute to climate change mitigation or adaptation, specifically projects focused on renewable energy, low carbon and efficient energy generation, climate smart agriculture technologies, clean urban transportation and others.
“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 mobilizing capital for green and sustainable investment” said Managing Director/Chief Executive Officer, Bank of Industry, Mr. Olukayode Pitan at the credit agreement signing ceremony, which took place at the BOI head office in Lagos.
Country Director for AFD, Mr. Xavier Muron, highlighted the importance of such a project in the framework of the fight against climate change globally. He added that this new credit line is a key milestone towards the achievement of the Paris Agreement. This Programme is timely since Nigeria is looking forward launching its Energy Transition Plan.
“The financing package will also include a €2.5million grant facility dedicated to a technical assistance programme aimed at mainstreaming Climate Finance within BOI’s strategy and operations. It will support capacity building for BOI and its customers, thereby providing tools for effective identification and development of eligible 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). BOI operates under a robust Environment and Social Governance (ESG) framework that has been integrated into its operations with a monitoring and reporting system, “he said.
