The Development Bank of Nigeria Plc (DBN) has secured accreditation status for the $250 million Green Climate Fund (GCF). By the accreditation, the DBN becomes the first Direct Access Entity (DAE) and the only authorised Nigerian channel for accessing green financing from the GCF.
Speaking on this landmark in Abuja yesterday, the Managing Director of the Bank, Tony Okpanachi, disclosed that the Bank’s accreditation by GCF will benefit Nigeria in many ways.
He added: “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. It 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 has become an existential threat to humanity as extreme weather conditions have caused devastating effects on livelihoods such as depletion of grazing lands for livestock, rising sea levels causing excessive 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.
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.”
On how much DBN can access under the Fund, he said: “DBN has been accredited under the Medium Category, which means it can access GCF’s funding for projects between $50 million and $250 million. DBN has also been accredited for on-lending, blending for loans and project management only which means at this stage, DBN cannot access grant funding, equity and guarantee instruments from GCF. However, plans are underway to seek an upgrade to include these instruments in the future.
Providing more insights into the core areas the project covers, the Managing Director explained that the accreditation covers projects that fall under the categories of basic fiduciary standards, specialised 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.
The Fund 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 organisations, 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.
However, Okpanachi, stressed that the GCF’s resources can only be used for climate mitigation and adaptation projects which must be aligned with Nigeria’s NDC focus areas.
