KEY POINTS

• The Development Bank of Nigeria (DBN) has inaugurated a $275 million climate finance programme for micro, small and medium enterprises (MSMEs).
• The DELTA programme will support investments in renewable energy, energy efficiency and climate resilient agriculture.
• The facility includes a $100 million contribution from the Green Climate Fund (GCF).
• It is expected to benefit about 1.3 million people and reduce greenhouse gas emissions by an estimated 4.5 million tonnes of carbon dioxide equivalent.

MAIN STORY

The Development Bank of Nigeria (DBN) has inaugurated a $275 million climate finance programme to help small businesses invest in clean energy, climate resilient agriculture and sustainable operations.

The programme, known as DBN Enterprise Lending for Transition and Adaptation (DELTA), is designed to address the funding constraints that prevent many Nigerian businesses from adopting technologies that could reduce operating costs and protect them against climate risks.

DBN Managing Director and Chief Executive Officer, Dr Tony Okpanachi, announced the initiative on the sidelines of the 31st United Nations Climate Change Conference (COP31) in Antalya, Türkiye.

He said Nigerian businesses were already experiencing the effects of climate change through unpredictable weather, production and supply chain disruptions, and rising energy costs.

Okpanachi explained that DELTA would combine loans, risk sharing arrangements and technical assistance to address barriers such as high initial investment costs, collateral requirements, limited access to credit and inadequate capacity to prepare bankable projects.

The facility will support businesses seeking to replace diesel generators with solar power, install efficient irrigation systems and strengthen agricultural production against unpredictable rainfall.

DBN will commit its own resources and work with the Green Climate Fund and other development partners to mobilise additional funding, technical expertise and risk sharing instruments.

The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, described the programme as a practical way to translate Nigeria’s climate commitments into financing opportunities for businesses.

Oyedele, who was represented by the ministry’s Deputy Director, IERD, Mr Abubakar Matazu, said the facility included a $100 million contribution from the Green Climate Fund.

He said the programme was expected to expand access to affordable, long term financing for MSMEs, benefit approximately 1.3 million people and reduce greenhouse gas emissions by an estimated 4.5 million tonnes of carbon dioxide equivalent.

The Director General of the National Council on Climate Change (NCCC), Dr Omotenioye Majekodunmi, represented by the council’s Head of Climate Finance, Mrs Benny Ejiofor, said the programme would extend climate financing opportunities beyond large corporations to small businesses, farmers and young entrepreneurs.

She identified opportunities such as solar powered freezers for market traders, electric vehicle businesses and climate smart farming as examples of how smaller enterprises could contribute to climate solutions.

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

He said this would include training businesses in bookkeeping and financial management, as well as helping financial institutions develop products suited to sectors often considered risky.

THE ISSUES

For many Nigerian MSMEs, the cost of energy is a direct pressure on business operations. A trader who relies on a diesel generator to preserve frozen food, for example, must spend money on fuel before making a sale. A solar powered freezer could reduce that recurring expense, but purchasing the equipment requires significant upfront capital.

This is the financing problem DELTA is intended to address. Businesses may have a viable investment opportunity but lack the collateral, credit history or initial funds needed to secure a loan.

The programme’s combination of lending, risk sharing and technical assistance is important because providing money alone may not be enough. Financial institutions also need ways to manage lending risks, while businesses may require support to prepare credible investment proposals and demonstrate their ability to repay.

Agriculture presents another potential area of impact. Farmers investing in efficient irrigation and climate resilient production methods may be better equipped to manage irregular rainfall. However, the usefulness of these investments will depend on whether financing reaches businesses that can adopt and maintain the technologies.

The programme’s success will therefore depend on its lending terms, the businesses selected, the availability of suitable projects and how effectively its partners deliver technical support.

WHAT’S BEING SAID

“Climate change is an economic, fiscal and development challenge for Nigeria.”

• Taiwo Oyedele, Minister of Finance and Coordinating Minister of the Economy.

“Today, we are opening a new door of opportunity for the thousands of small businesses that power our economy.”

• Benny Ejiofor, Head of Climate Finance, National Council on Climate Change.

“Success of DELTA would be measured not merely by the size of its financing facility but by its impact on businesses through lower energy costs, increased productivity, stronger resilience and sustainable economic growth.”

• Tony Okpanachi, Managing Director and Chief Executive Officer, DBN.

WHAT’S NEXT

DBN Executive Director and Chief Financial Officer, Mrs Ijeoma Ozulumba, said the bank hoped to attract additional partners and build a strong pipeline of climate focused projects.

She said DBN was working to ensure that implementation gained momentum ahead of COP32, scheduled to hold in Ethiopia in 2027.

The Founder and Chief Empathy Officer of Glean Sustainable Renewable Solutions Ltd., Mr Dele Awosika, called for the identification of viable businesses and the development of pilot projects to demonstrate the programme’s potential.

He highlighted climate resilient crop production and low carbon agricultural practices, particularly in rice and cassava production, as areas requiring technical expertise and targeted financing.

BOTTOM LINE

DELTA offers Nigerian MSMEs a potential route to finance investments that could lower energy expenses and reduce exposure to climate related disruptions. Its real economic value will depend on whether the funding reaches businesses that have struggled to access affordable credit and whether the supported investments deliver measurable improvements in productivity and resilience.