DBN Launches $275m Climate Finance Programme for Nigerian MSMEs

The Development Bank of Nigeria has launched a $275 million climate finance programme to fund renewable energy, climate-resilient agriculture and low-carbon operations among micro, small and medium-sized enterprises. The Green Climate Fund will contribute $100 million to the facility, which DBN expects to reach about 1.3 million people and cut greenhouse gas emissions by an estimated 4.5 million tonnes of carbon dioxide equivalent.

DBN unveiled the scheme, formally the Enterprise Lending for Transition and Adaptation Programme, on the sidelines of the 31st United Nations Climate Change Conference in Türkiye. The launch took place on Friday. The programme is designed to move affordable, long-term capital to small businesses that cannot currently finance cleaner technologies or protect themselves against extreme weather.

What did the bank's chief executive say?

Managing Director and Chief Executive Officer Tony Okpanachi called the initiative an extension of DBN's founding mandate to close Nigeria's MSME financing gap. He framed climate change as an immediate economic threat rather than a distant one, citing pressure on production, supply chains and energy costs.

"With a target size of $275 million, Delta will expand assets to finance for Nigerian MSMEs, investing in clean energy and climate resilient agriculture," Okpanachi said. He described concrete use cases: a food processor replacing costly diesel generation with solar power, or a farm investing in efficient irrigation to manage unpredictable rainfall.

DBN began operations in 2017 with a mandate to channel capital to productive and underserved enterprises. Okpanachi said the bank is now extending that mandate to climate change, one of the defining challenges of the period.

How will the money be deployed?

The facility combines three instruments: direct lending, risk-sharing arrangements and technical assistance. Okpanachi said the design targets specific barriers that discourage Nigerian financial institutions from funding climate investments:

• high upfront investment costs
• collateral constraints
• inadequate loan tenors
• limited project preparation capacity
• perceived risk attached to climate projects

He stressed that DELTA is a market-building exercise, not merely a lending window. DBN intends to work with Nigerian banks to expand their capacity to identify and finance climate investments, and with MSME associations to build a pipeline of viable projects.

Who else is backing the programme?

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

"Public resources alone cannot deliver the scale of investment required," Matazu said. He said the federal government is committed to providing the fiscal, policy and institutional environment needed to mobilise climate finance, including concessional funding, guarantees and private capital.

Benny Ejiofor, Head of Climate Finance at the National Council on Climate Change, said the facility would spread climate financing beyond large corporations. "MSMEs are the backbone of Nigeria. They create jobs. They feed families. They drive innovation. But we also know that they are the most vulnerable to climate change, to floods, to droughts, to rising energy costs. And yet, they are also the solution," he said. He urged banks to expand green lending and small businesses to embed climate considerations in their operations.

GIZ, the German development agency, will supply technical assistance alongside the financing. Alexander Haack, Director of Climate Change, Rural Development and Infrastructure at GIZ, said the support would strengthen the capacity of businesses and banks to prepare bankable projects. He noted that GIZ's agricultural finance programme has already facilitated more than €57 million in private financing for rural farmers.

What happens next?

DBN Executive Director and Chief Financial Officer Ijeoma Ozulumba said the bank already holds a pipeline of prospective projects and expects substantial deployment of the facility before the next UN climate conference. Further partners are expected to join as the programme scales. The milestone to watch is the volume actually lent against the $275 million target before that deadline.