Development Bank of Nigeria launches a $275m climate finance fund to help MSMEs invest in renewable energy and climate-resilient agriculture

The Development Bank of Nigeria (DBN) has launched a $275m climate finance programme to help micro, small and medium-sized enterprises (MSMEs) invest in renewable energy, climate-resilient agriculture and other low-carbon business activities.

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The initiative, known as the Development Bank of Nigeria Enterprise Lending for Transition and Adaptation (DELTA) Programme, was unveiled on Friday on the sidelines of the 31st United Nations Climate Change Conference (COP31) in Antalya, Türkiye.

The programme is designed to address financing barriers that prevent small businesses from adopting climate-friendly technologies and preparing for the effects of extreme weather conditions.

It is expected to mobilise affordable, long-term financing, including a $100m contribution from the Green Climate Fund. The initiative also aims to benefit approximately 1.3 million people and reduce greenhouse gas emissions by an estimated 4.5 million tonnes of carbon dioxide equivalent.

Speaking at the launch, DBN Managing Director and Chief Executive Officer, Tony Okpanachi, said the programme expanded the bank’s mandate to address the financing gap facing Nigerian businesses, particularly enterprises in underserved sectors.

He described climate change as an immediate economic challenge for Nigerian businesses, citing its effects on production, supply chains and energy costs.

Okpanachi said the transition to cleaner technologies also presented opportunities for businesses to reduce operating expenses, improve productivity and strengthen their resilience.

He explained that the facility would combine lending, risk-sharing arrangements and technical assistance to encourage financial institutions to support climate-related investments.

Among the barriers the programme seeks to address are high initial investment costs, inadequate loan tenors, collateral requirements, limited project preparation capacity and the risks financial institutions associate with climate investments.

The DBN chief executive gave examples of how the funding could support businesses, including helping food processors replace expensive diesel generators with solar power and enabling agricultural enterprises to install efficient irrigation systems to cope with unpredictable rainfall.

He said the programme was also intended to strengthen the capacity of Nigerian financial institutions to identify and finance viable climate-related projects.

Representing the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, the Deputy Director, IERD, at the Federal Ministry of Finance, Abubakar Matazu, described climate change as an economic and development challenge requiring significant private-sector investment.

Matazu said Nigeria could not rely solely on public resources to finance its climate transition, stressing the importance of attracting concessional funding, guarantees and private capital.

He added that the Federal Government remained committed to creating the fiscal, policy and institutional conditions needed to make climate finance more accessible to businesses.

Also speaking, the Head of Climate Finance at the National Council on Climate Change, Benny Ejiofor, said the programme would help make climate financing accessible to small businesses rather than concentrating opportunities among large corporations.

He urged financial institutions to expand green lending and encouraged MSMEs to incorporate climate considerations into their business operations.

The Director of Climate Change, Rural Development and Infrastructure Division at GIZ, Alexander Haack, said the organisation would provide technical assistance to complement the financing facility.

He explained that the support would include strengthening the capacity of businesses and financial institutions to develop bankable climate-related projects.

Haack also disclosed that GIZ’s agricultural finance programme had facilitated more than €57m in private financing for farmers in rural communities.

Meanwhile, DBN Executive Director and Chief Financial Officer, Ijeoma Ozulumba, expressed confidence that the programme would attract additional development partners and investors.

She said the bank already had a pipeline of prospective projects and expected substantial deployment of the facility before the next climate conference.

The launch comes as Nigerian businesses face rising energy costs and growing exposure to climate-related disruptions, including flooding, drought and unpredictable rainfall.

For small enterprises that depend on diesel-powered generators or weather-sensitive agricultural activities, access to affordable long-term financing could determine how quickly they adopt cleaner energy sources and climate-resilient technologies.

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The  programme’s success will depend on how effectively the financing, risk-sharing arrangements and technical support reach businesses that need them. The $275m target represents the programme’s planned financing capacity, rather than an indication that the entire amount has already been disbursed.