DBN Secures Green Climate Fund Accreditation

• To Boost Nigeria’s efforts in combating climate change

BY EDMOND ODOK – The Development Bank of Nigeria Plc (DBN) has secured Green Climate Fund (GCF) Accreditation under the Medium Category, granting it access to GCF funding for projects between $50 million and $250 million.

As a result, the Bank has become the first Direct Access Entity (DAE) and the sole authorized Nigerian channel for obtaining green financing from the GCF. Also, the accreditation covers on-lending, blending for loans, and project management.

However, at this stage, DBN will be unable to access grant funding, equity, and guarantee instruments from GCF. This is as a statement by the Bank assured that going forward, plans are underway to seek an upgrade to include these instruments in the foreseeable future.

The statement explained that the Green Climate Fund (GCF) will provide funds to Nigeria at highly concessional rates for climate mitigation and adaptation projects aligned with Nigeria’s Nationally Determined Contributions (NDC).

Importantly, the Nigerian Climate Change Commission (NCCC) will collaborate closely with the GCF for project selection, appraisals, and alignment with the NDC focus areas while shortlisted projects will require detailed funding proposals for approval by the GCF.

According to the DBN’s Managing Director, Dr Tony Okpanachi, the GCF accreditation will benefit Nigeria in various ways, stressing that; “Through this collaboration, Nigeria will receive a boost in its fight against the effects of climate change, such as 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 among others.”

He said the accreditation would “also help create greater awareness on climate change, culminating in greater involvement of Nigerians in climate actions prompting a shift towards the green economy as well as raise the Nigerian portfolio in climate financing globally and unlocking more climate funds.”

While also highlighting the existential threat of climate change to humanity, Dr Okpanachi cited its devastating effects on livelihoods, such as depletion of grazing lands, rising sea levels causing flooding that displaces communities, changing rainfall patterns affecting agricultural yields, poor water and air quality impacting health, and extensive loss of biodiversity (plant and animal species) among other implications.

He further explained that the accreditation empowers DBN 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.”

Importantly too, this accreditation covers 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, Okpanachi said.

The GCF is the largest fund in the world dedicated to helping small island states, least-developed countries, and developing countries reduce their greenhouse gas emissions and build their capacity to address climate change. It achieves this by providing climate finance to developing countries and supporting their adaptation and mitigation efforts through a project portfolio implemented by accredited entities, which are its partner organizations.

The Accredited Entities, which may be International Accredited Entities or Direct Access Entities (DAEs), are responsible for developing funding proposals to be reviewed by the GCF. They also oversee, supervise, manage, and monitor the GCF-approved projects.

Indeed, this is a significant milestone for DBN and Nigeria as a whole, offering opportunities for the country to enhance its resilience against climate change.