Climate Finance: A Lifeline for Nigeria’s States and Businesses
Nigeria is facing a critical juncture as the impacts of climate change intensify, affecting every aspect of life and economic activity. The River Niger, once a lifeline for communities, has become a source of devastation when it overflows its banks. In Ibaji Local Government Area, Kogi State, entire rice paddies were lost to floods, displacing families and forcing schools to serve as emergency shelters. Ojochenemi, a young rice farmer, expressed the deep uncertainty many face: “Even if the rains stop, how do I start again? Where do I get money?” Her question reflects a broader national dilemma.
Climate change is no longer a distant threat; it is an immediate reality. Floods are destroying farms across the country, droughts are causing food shortages, and erratic rainfall is increasing the costs of food and energy. Experts estimate that Nigeria could be losing nearly $100 billion annually due to climate shocks. If adaptation efforts do not scale up, the nation’s GDP could shrink by as much as 11% by 2050.
Despite these challenges, Nigeria’s response remains underfunded. The country requires $17.7 billion each year to meet its climate goals, but only a fraction of this amount is actually secured. Between 2015 and 2021, just $4.93 billion was allocated across 828 projects. This gap leaves states and businesses vulnerable to the growing impacts of climate change.
The subnational level bears the brunt of this shortfall. State governments are on the frontlines of climate impacts, dealing with floods, food insecurity, and energy deficits. However, they often lack the capacity to access international or domestic climate funds. Barriers such as weak financial management systems, limited technical expertise, fragmented governance, and bureaucratic hurdles prevent effective engagement with multilateral funds like the Green Climate Fund.
Meanwhile, the private sector, especially eco-friendly businesses and green entrepreneurs, faces its own set of challenges. Limited information about available finance, insufficient incentives, and high capital costs hinder their ability to tap into global climate finance. As a result, billions of dollars in potential funding remain untapped, while communities continue to suffer from climate shocks.
This situation demands urgent action. Climate change is not just an environmental issue; it is an existential economic challenge that threatens food security, disrupts livelihoods, and undermines national stability. The Nigerian Economic Summit (NES #31), themed “The Reform Imperative: Building a Prosperous and Inclusive Nigeria by 2030,” presents a crucial opportunity to reset the narrative.
If Nigeria’s reform agenda is to succeed, climate resilience and access to finance must be central pillars. Empowering states and businesses to mobilize climate finance is no longer optional—it is a national imperative.
In response to this need, the Partnership for Agile Governance and Climate Engagement (PACE), with support from the UK Foreign, Commonwealth and Development Office, has developed the Guide to Accessing Climate Finance. This landmark resource, to be launched during NES #31, aims to break down barriers and open new pathways for financing climate action.
The Guide offers several key features:
- A mapping of 93 climate finance sources, with detailed guidance on 18 priority sources most accessible to Nigeria, ranging from the Global Environment Facility and Green Climate Fund to domestic private facilities like Access Bank/JICA and Sterling One Foundation.
- Step-by-step strategies to help states and eco-friendly businesses design fundable proposals, meet eligibility criteria, and comply with reporting requirements.
- A readiness assessment checklist that enables states to diagnose institutional and financial gaps, and outline reform actions to strengthen their eligibility for climate funds.
In short, the Guide serves as both a technical manual and a political tool, helping Nigeria’s states and private sector move from aspiration to action in securing climate finance.
The advantages of this Guide are profound:
- Unlocking finance at scale: By equipping states with the tools to meet international fiduciary and governance standards, it increases their chances of securing billions from multilateral and bilateral agencies.
- Empowering the private sector: Green businesses can leverage the Guide to identify financing windows, from concessional loans to climate bonds, and attract investors.
- Strengthening reforms: By embedding climate finance into state planning and budgeting frameworks, the Guide reinforces Nigeria’s Climate Change Act, Nationally Determined Contributions (NDCs), and development priorities.
- Driving inclusion: The Guide also highlights the importance of inclusive climate governance, ensuring that women, youth, and vulnerable communities are not left behind in the green transition.
On Monday, October 6, 2025, the Guide will be officially launched during NES #31 at the Transcorp Hilton in Abuja. The session, convened by PACE and NESG, will bring together Ministers, Governors, development partners, and investors to endorse and adopt the Guide as a national resource.
This launch marks a decisive turning point in Nigeria’s climate finance journey. It signals the country’s readiness to confront the climate challenge with seriousness, to reform its institutions, and to mobilize the financing required for resilience and green growth.
Nigeria stands at a crossroads. The climate crisis is already here, but so too are the opportunities. With the right tools, reforms, and partnerships, we can transform climate finance from an elusive goal into a driver of resilience, jobs, and inclusive prosperity.
I call on state governments to embrace the Guide and commit to the reform actions necessary to unlock climate finance. I urge the private sector to seize the financing windows outlined in the Guide to scale renewable energy, climate-smart agriculture, and resilient infrastructure. And I appeal to development partners to rally behind this framework, investing not just in projects but in Nigeria’s capacity to deliver lasting change.
The future we seek, one of resilience, sustainability, and prosperity, depends on the choices we make today. Unlocking climate finance is not just about protecting the environment. It is about securing Nigeria’s economic survival and ensuring that our children inherit a nation equipped to thrive in a climate-challenged world.
