Nigeria taps banks, local capital to close $171bn climate finance gap

Nigeria is turning to domestic financial institutions and private capital to bridge a staggering $171 billion climate financing gap, as policymakers warn that multilateral funding accounts for less than two percent of the continent’s climate finance needs.

The financing challenge took centre stage at the 2026 Financial Institutions Training Centre (FITC) Sustainability and ESG Conference in Lagos, where regulators, bankers, and development finance leaders agreed that the country’s path to achieving net-zero emissions by 2060 will depend less on external aid and increasingly on local capital markets, green bonds, and sustainability-linked financing.

The discussions come as Nigeria intensifies efforts to mobilise blended finance to support climate adaptation, clean energy, sustainable agriculture, and resilient infrastructure while reducing dependence on increasingly constrained international climate funds.

Philip Ikeazor, deputy governor for economic policy at the Central Bank of Nigeria (CBN), said Africa could no longer rely on traditional sources of climate finance, noting that multilateral climate funds contribute less than two percent of the continent’s total climate financing requirements.

According to him, the funding shortfall presents an opportunity for domestic financial markets to become the primary drivers of sustainable investment.

To accelerate capital mobilisation, Ikeazor called for wider adoption of innovative financing instruments, including green bonds and sustainability-linked loans, while urging…