What are your thoughts on the climate finance ecosystem in Nigeria?
In the last decade, Nigeria has accessed less than $5 billion in climate financing, despite the availability of $100 billion annually for developing countries. The New Collective Quantified Goal (NCQG) on Climate Finance, which was approved at CoP29 in Baku, has raised this funding to $300 billion annually till 2035. Will Nigeria be able to tap into this opportunity? In your opinion, what needs to be done to ensure Nigeria benefits from these funds?
Nigeria's climate finance ecosystem is still evolving, with various stakeholders working together to address the country's climate challenges. The Development Bank of Nigeria has mobilized $250 million to finance Nigeria's transition to a low-carbon, climate-resilient economy through its accreditation with the Green Climate Fund. This initiative aims to support a unified strategy for climate finance in Nigeria.
Key Challenges:
- *Limited Access to Climate Finance*: Nigeria faces significant challenges in accessing climate finance, relative to its climate vulnerability and greenhouse gas emissions profile.
- *Skilled Transaction Intermediation*: There's a notable gap in skilled transaction intermediation, which hinders the development of financeable project pipelines.
- *Inadequate Coordination*: Improved coordination among diverse stakeholders across the climate and green finance community is essential for effective climate finance mobilization.¹ ²
*Opportunities:*
- *Growing Awareness*: There's growing awareness of the need for cooperation and climate finance in Nigeria, with various initiatives and projects underway.
- *Climate Finance Instruments*: Institutions like the African Development Bank and International Finance Corporation offer climate finance instruments, such as concessional loans and grants.
- *Private Sector Engagement*: Private sector engagement is crucial for mobilizing climate finance, with opportunities for blended finance and innovative financing mechanisms.
*Way Forward:*
- *Strengthening Institutional Capacity*: Enhancing institutional capacity and coordination among stakeholders is vital for effective climate finance mobilization.
- *Increasing Access to Climate Finance*: Improving access to climate finance for vulnerable communities and sectors is critical for Nigeria's climate resilience.
- *Promoting Sustainable Development*: Climate finance can play a pivotal role in driving sustainable development in Nigeria, particularly in sectors like agriculture, energy, and infrastructure.³
@okkhemurry Do you have potential suggestions for the Way forward? i.e. How do you think we should go about strengthening institutional capacity and coordination amongst stakeholders? How should we improve climate finance to vulnerable communities?
@okkhemurry Come up with a concept note and we can explore how we can collaborate to actualise it
@ossapcfse Let me drop my WhatsApp number for further discussion. 07038844902/muritalaoke@nipsskuru.gov.ng.
The climate finance ecosystem in Nigeria is still at its infancy. What I think is necessary for growth and development is liberalization and access. What i mean by this is we need to adopt a bottom-up approach instead of the top-down that we are defending now. We also need more advocacy and sensitization on the various instruments and opportunities. Many people think climate funds are somewhere at a COP summit waiting to be accessed, while billions of Naira in Kurmi and Singa market in Kano are there for the taking. What i think will drive interest and liquidity is succesful implementation of green projects with compelling ROI. Within a short time, competition and capacity will improve. We would have more local case studies to point to. Technology will follow suit and we would be able to justify and attract the international funds. Until then, to many, climate finance is just a ruse. I was in the company of a few governors recently and their views were generally pessimistic. We have to change this narrative.
@hamzajakada, whilst I agree with much of what you wrote, I think a bottom-up approach will be challenging given the coordination and resource requirements, which are scarce at the subnational level. There is also the matter of political will from various subnational actors, which may delay efforts. It may also lead to fragmented alignment with National priorities. However, I think both top-down and bottom-up approaches are required in tandem. The top-down approach provides the structure, framework, and transparency needed to mobilize international funding at scale, while the bottom-up approach develops the project pipelines and local innovation. More awareness and advocacy are certainly required to ensure subnational actors gain a better understanding of climate finance and how it can enhance development.
