August 23rd, 2022 Lagos, Nigeria – The Bank of Industry (BOI) and the French Development Agency (AFD) are pleased to announce that they built a partnership for a €100mn credit-line for the expansion of green finance in Nigeria.
The transaction was approved by AFD under its Transforming Financial Systems for Climate (TFSC) Program with the Green Climate Fund (GCF). The TFSC is a USD650mn-Program developed in 17 countries for 100% climate investment projects.
The credit facility will focus on financing investments that contribute to climate change mitigation or adaptation, specifically projects focused on renewable energy, low carbon and efficient energy generation, climate smart agriculture technologies, clean urban transportation and others.
“This is the beginning of a long-term mutually beneficial relationship and a significant step for BOI as we scale up our green-lending capacity. Given the serious threat that climate change poses to equitable and sustainable development in Nigeria. It is critical for us at BOI to take the lead in mobilizing capital for green and sustainable investment” said Mr. Olukayode Pitan, Managing Director/Chief Executive Officer, Bank of Industry, at the credit agreement signing ceremony which took place at the BOI head office in Lagos.
Mr. Xavier Muron, Country director for AFD, highlighted the importance of such a project in the framework of the fight against climate change globally. He added that this new credit line is a key milestone towards the achievement of the Paris Agreement. This Programme is timely since Nigeria is looking forward launching its Energy Transition Plan.
The financing package will also include a €2.5mn grant facility dedicated to a technical assistance programme aimed at mainstreaming Climate Finance within BOI’s strategy and operations. It will support capacity building for BOI and its customers, thereby providing tools for effective identification and development of eligible bankable climate-related projects as well as improving the readiness of the bank’s customers to implement green practices in their operations.
This transaction also highlights both AFD’s and BOI’s longstanding commitment to achieving the UN’s Sustainable Development Goals (SDGs). BOI operates under a robust Environment and Social Governance (ESG) framework that has been integrated into its operations with a monitoring and reporting system.
BOI also leverages on a global network of partners to stay at the forefront of sustainable development. In addition to its active role in the UN Global Compact, BOI is also a member of the UN Environment Programme Finance Initiative (UNEP-FI) and a signatory to UNEP-FI’s Principles for Responsible Banking. Recently, it joined the World Economic Forum’s Mobilizing Investment for Clean Energy in Emerging Economies (MICEE) Initiative.
Mr. Pitan acknowledged the dedication of AFD and its strategic partners to ensure the consummation of this deal: “This is the first time we have worked with AFD, and we were impressed by how the AFD invested significant time and effort to structure the facility to our specific requirements and operating model. This is a strong foundation for a long-term partnership.”
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About Bank of Industry: The Bank of Industry (BOI) is Nigeria’s foremost and oldest Development Finance Institution and has been in operation for over 60 years: initially incorporated in 1959 as Investment Company of Nigeria (ICON), it became BOI in 2001.BOI’s mission is to transform Nigeria’s industrial sector by providing financial and advisory support services to enterprises. BOI promotes financial inclusion through long-term financing and counter-cyclical loans diversified across industries such as agro-processing, gender businesses and renewable energy, among others. As BOI is not a deposit money Bank, it has to frequently engage in capital raising activities to sustain its capacity to continue supporting its customers across key sectors and segments of the Nigerian economy.
BOI has raised a total of $5bn from the international financial market in the last five years. This includes the just-concluded landmark €1bn guaranteed Senior loan facility in August 2022. In the last 6 years, the Bank has disbursed over $3.6bn to over 4.2mn enterprises which has facilitated the creation of over 9mn direct and indirect jobs, thereby advancing sustainable development. BOI holds a National Long-Term Rating of ‘AAA (nga)’ and Long-Term Issuer Default Rating of ‘B’ with a stable outlook from Fitch Ratings; and an ‘Aa3.ng/NG-1’ national scale issuer rating and a ‘B2’corporate family rating (CFR) from Moody’s.
For more information, visit https://www.boi.ng
About AFD: The Agence Française de Développement (AFD – French Development Agency) funds, supports, and accelerates the transitions to a fairer and more sustainable world – aligned on the Sustainable Development Goals. Focusing on climate, biodiversity, peace, education, urban development, health and governance, our teams carry out more than 4,000 projects in France’s overseas departments and territories and another 115 countries. In this way, we contribute to the commitment of France and French people to support the sustainable development goals.
AFD is present in Nigeria since 2008 with its main office based in Abuja along with an additional branch in Lagos. Its main sectors of intervention in the country are energy, high education, agriculture, water supply as well as clean transportation.
For more information, visit https://www.afd.fr/en.
