Stakeholders from Nigeria’s financial sector, government agencies and climate finance ecosystem have called for regulatory reforms to unlock domestic financing for carbon markets, saying the move could accelerate investments in clean cooking, renewable energy and nature-based projects across the country.

 

The call was made during a validation workshop organised under the Policy and Regulatory Innovations for Scaling Markets (PRISM) Nigeria initiative, themed “Unlocking Domestic Finance for Carbon Markets.”

 

The programme seeks to integrate carbon markets into Nigeria’s domestic financial system by recognising carbon-linked revenues as credible and investable assets capable of attracting local capital.

 

PRISM Nigeria is implemented by the Clean Cooking Alliance in partnership with the Nigeria Off-Grid Market Acceleration Programme (NoMAP) and the Global Off-Grid Solar Association (GOGLA), in collaboration with the Office of the Senior Special Assistant to the President on Climate Finance and Stakeholder Engagement and the Nigerian Alliance for Clean Cookstoves.

 

Delivering the keynote address, the Senior Special Assistant to the President on Climate Finance and Stakeholder Engagement, Ibrahim Shelleng, described the workshop as timely, stressing that Nigeria must shift from years of climate policy development to implementation through greater reliance on domestic financing.

 

According to him, climate finance should not be viewed solely as international funding but should also include local capital directed at climate mitigation and adaptation projects.

 

“Domestic finance brings ownership, and it brings speed. Our communities cannot wait two to three years for international validation processes; we must look inward to raise the finance our climate projects need,” he said.

 

Director of Energy, Transportation and Infrastructure at the National Council on Climate Change (NCCC), Michael Ivenso, said domestic finance and enabling regulations would play a critical role in expanding Nigeria’s clean cooking sector, which he noted could benefit about 45 million people by 2030.

 

He explained that while carbon credits provide an important source of non-traditional financing, they must be recognised as tradable financial instruments to attract investments from domestic financial institutions.

 

Ivenso also highlighted the importance of the Letter of Authorisation (LoA), describing it as a sovereign instrument that enables the monetisation of carbon assets.

 

He disclosed that Nigeria has issued 25 Letters of Authorisation since May, describing the development as a milestone in strengthening the country’s carbon market framework.

 

He stressed that a credible monitoring, reporting and verification (MRV) system would be essential to ensuring transparency, maintaining the integrity of carbon assets and boosting investor confidence.

 

Through research, regulatory mapping and stakeholder consultations conducted in Nigeria and Kenya, PRISM identified 15 priority regulatory interventions targeting key institutions, including the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), the National Insurance Commission (NAICOM), the National Pension Commission (PenCom), as well as relevant ministries and market institutions.

 

Participants at the workshop prioritised four key reforms for further consideration: developing carbon credit-linked bond instruments, incentivising loans for carbon credit-related projects, integrating carbon credit data into climate risk databases, and incorporating carbon credits into environmental, social and governance (ESG) and climate disclosure frameworks.

 

Clean Cooking Alliance representative Rajeev Gupta underscored the importance of reliable data in strengthening Nigeria’s carbon finance ecosystem.

 

He said consistent data would improve decision-making, enhance transparency and support sustainable growth in the country’s clean cooking and carbon finance sectors.