The Centre for 21st Century Issues (C21st Issues) congratulates the Development Bank of Nigeria (DBN) on achieving accreditation to the Green Climate Fund (GCF). The accreditation was confirmed on Wednesday, July 17, 2024.
At the 39th Meeting of the GCF Board, which is holding in South Korea from July 15 to 18, the DBN was officially approved as a Direct Access Entity, marking a significant milestone as Nigeria’s first Direct Access Entity.
Becoming accredited to the GCF as a Direct Access Entity is no small feat. It requires significant scrutiny, thorough documentation, and assessments to ensure that the organisation is well-equipped to receive and deploy funds effectively for communities impacted by climate change.
The Green Climate Fund’s Direct Access feature is designed to help developing countries integrate climate funding with their national climate action plans. A Direct Access Entity, such as the Development Bank of Nigeria, is a national organisation authorised to receive project funds on behalf of the country, streamlining the process and avoiding high transactional costs associated with using external intermediaries.
Nigeria’s journey towards securing a Direct Access Entity has faced challenges, with various organisations like Nigeria’s Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and the Bank of Industry (BOI) being previously considered. Despite hurdles, the Development Bank of Nigeria’s accreditation marks a significant milestone. Other African countries like Kenya, Namibia, Ghana, and Senegal have already achieved Direct Access accreditation, highlighting Nigeria’s delayed progress.
The Development Bank of Nigeria’s accreditation should serve as a catalyst for other organisations and government entities in Nigeria to seek GCF accreditation. Encouraging public and private entities to pursue accreditation can increase Nigeria’s access to climate finance.
Nigeria can utilise the new Project Specific Assessment Approach (PSAA) to expedite access to GCF resources. The PSAA involves evaluating an organisation’s capacity to adhere to GCF accreditation criteria for executing a single climate project or programme. The intended project must align with the Applicant’s climate priorities and GCF’s strategic goals.
The Development Bank of Nigeria’s accreditation to GCF could not have come at a better time when the Fund for Responding to Loss and Damage (FLD) is currently being operationalised, and there are discussions around using accredited entities from other climate funds to access the FLD. The Accreditation of DBN strategically positions Nigeria to access climate finance through FLD.
Nigeria must, therefore, expedite the accreditation process for entities like NIRSAL, BOI, and Sub-National Entities to widen the opportunities for accessing climate finance directly.
As climate finance becomes integrated into Nigeria’s budget inflow, it is essential to prepare by developing projects with solid climate rationale to attract grants and support budget implementation, reducing reliance on debts for financing developmental projects.
By Titilope Ngozi Akosa, Executive Director of the Centre for 21st Century Issues (C21st Issues), and one of the Alternate Active Civil Society Observers to the GCF
