….Accreditation To Enhance Nigeria’s Climate Change Mitigation Initiatives
The Development Bank of Nigeria Plc (DBN) has received the Green Climate Fund (GCF) accreditation under the Medium Category, which implies that it can access GCF’s funding for projects between $50 million and $250 million.
By this development, DBN has become the first Direct Access Entity (DAE) and the only authorized Nigerian channel for accessing green financing from the GCF.
Similarly, the bank has also been accredited for on-lending, blending for loans and project management only, which means that at this stage, it cannot access grant funding, equity and guarantee instruments from GCF.
However, the management hinted that plans were underway to seek an upgrade to include these instruments in the future as part of its efforts to enhance current initiatives of the Federal Government to combat the climate change challenges in the country
GCF funds will be administered on a “highly concessionary” rate basis through a structure that will involve close collaboration with the NCCC for project selection, appraisals and alignment with the Nigeria NDC’s. Shortlisted projects will then require detailed funding proposals that will be sent to the GCF for approval.
GCF’s resources can only be used for climate mitigation and adaptation projects which must be aligned with Nigeria’s NDC focus areas.
The Managing Director of the Bank, Dr. Tony Okpanachi, while addressing journalists in Abuja on Tuesday said that the bank’s accreditation by GCF, would benefit Nigeria in many ways and that “through this collaboration, Nigeria will receive a boost in its fight against the effects of climate change (desertification, global warming, unpredictable rainfall patterns, storms, floods) as well as assist the country’s efforts towards achieving sustainable development, promotion of environmentally friendly technologies in key sectors of the economy including agriculture, manufacturing, healthcare, education, transport and logistics, etc.
According to him, the accreditation will “also help create greater awareness on climate change, culminating in greater involvement of Nigerians in climate actions prompting a shift towards green economy as well as raise the Nigerian portfolio in climate financing globally, and unlocking more climate funds.”
Okpanachi noted that climate change had become an existential threat to humanity as extreme weather conditions have caused devastating effects on livelihoods – depletion of grazing lands for livestock, rising sea levels causing excessing flooding that displaces communities, changing rainfall patterns that negatively affect agricultural yields, poor water and air quality that impact health, and extensive loss of biodiversity (plant and animal species) among other implications.
He further noted that, with the accreditation, the DBN is empowered to “develop and submit funding proposals for projects and programmes, oversee management and implementation of projects and programmes, deploy a range of financial instruments such as concessional loans, co-financing and blending for loans and mobilize private sector capital for such climate change initiatives.”
The banker also explained that the accreditation covered projects that fall under the categories of basic fiduciary standards, specialized fiduciary standards, project management, on-lending and/or blending for loans, ESS Risk: Category B and medium-sized projects.
The Green Climate Fund (GCF) is the world’s largest dedicated fund helping Small Island states, and least developed and developing countries reduce their greenhouse gas emissions and enhance their ability to respond to climate change.
It does this by channelling climate finance to developing countries and investing in their adaptation and mitigation activities through a project portfolio that is implemented by its partner organizations, known as Accredited Entities. These Accredited Entities, which can either be International Accredited Entities or Direct Access Entities (DAEs), develop funding proposals to be considered by the GCF. They also oversee, supervise, manage, and monitor their respective GCF-approved projects.
This is indeed a great milestone not just for DBN, but for Nigeria as a whole given the opportunities it provides for the country to build resilience against climate change.
