CLIMATETRACKER.

ORG COP 23, BONN, GERMANY,

NOVEMBER, 2017

Paying for our Climate in Sub-Saharan

Africa: The Nigeria Experience

ONAWOLE TEMITOPE
Onawogogle@gmail.com

Climate Tracker Contestant

Executive Summary
In actual sense, a failure to invest in taking care of our climate will inadvertently lead to
food insecurity and the uninhabitable environment. As that occurs, there will also be a
large increase in the movement of refugees. Therefore, access to funds has become
imperative to climate finance for facilitating green development, reducing GHG
emissions, and the effects of climate change in our society. So, climate finance provides
the best avenue for Nigeria to increase the flow of climate funds in both short and
medium term, giving her the required edge to battle environmental change
comprehensively.

Introduction
Africa has been distinguished as one of the parts of the world most powerless against the
effects of climate change. Climate change is as of now a reality in Africa. There are
drawn out and heightened droughts in eastern Africa; unprecedented floods in western
Africa; depletion of rain forests in equatorial Africa; and an increase in ocean acidity
around Africas southern coast. Tremendously altered weather patterns and climate
extremes debilitate agricultural production and food security, health, water and energy
security, which in turn undermine Africas ability to grow and develop. Essentially,
climate change, also called global warming, alludes to the rise in average surface

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temperatures on Earth through the arrival of carbon dioxide and other greenhouse gases
into the air.
Sub-Saharan Africa (SSA) has contributed the slightest to the global accumulation of
greenhouse gas emissions: less than 4% of global CO2 emissions originate from the
African continent. However, this region will be more helpless against the effects of
climate change than any other. The Intergovernmental Panel on Climate Change (IPCC)
predicts that by 2020, crop yields from rain-fed agriculture in SSA may fall by up to
50%, and 75-250 million people could be influenced by expanded water deficiencies.
SSA is now exceedingly vulnerable to droughts, which are linked to decreases in
agricultural yields and in turn, increases in food prices. Subsistence farmers, the majority
of whom are women, are likely to be particularly affected. The regions helplessness to
climate change along these lines makes a convincing case for SSA to get huge financing
for adaptation.
Climate finance places the burden of compensation for the global climate change impacts
worst experienced by developing nations on developed nations who are to a great extent
responsible for the damage caused. Climate finance, which refers to all financial flows
from private as well as public sources directed at climate change responses globally, is
grounded in the UNFCCCs principle of common but differentiated responsibilities.
The principle which considers the developed worlds historical responsibility for GHG
emissions and the disparity in wealth and capacities for adaptation and mitigation
between the developed and developing countries.

Figure1: Breakdown of Climate Finance of Various Public Sources

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Figure 2: Breakdown of Climate Finance of Various Private Sectors

Table 1: Selected breakdowns of climate finance in 2012, 2013 and 2014 (USD
billion)

2012 UPDATED 2013 UPDATED 2014 Average 2013 & 2014

GLOBAL TOTAL 359 342 392 367
DOMESTIC 275 253 290 272
TOTAL INVESTMENT IN 84 90 102 96
RENEWABLE ENERGY
PUBLIC INVESTMENT IN 265 244 284 264
ENERGY EFFICIENCY
PUBLIC INVESTMENT IN 32 31 26 29
ADAPTATION
PRIVATE COMMERCIAL 22 27 27 27
FINANCE
GRANTS AND LOW-COST DEBT 80 87 61 74
MARKET RATE DEBT 70 74 125 100

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Table 2: Breakdown of 2013 and 2014 climate finance by public and
private actors (USD billion)
2013 2014 Average
PRIVATE 199 241 220
PROJECT DEVELOPERS 88 92 90
CORPORATE ACTORS 47 59 53
HOUSEHOLDS 40 41 41
COMMERCIAL FINANCIAL 21 46 33
INSTITUTIONS
PRIVATE EQUITY, VENTURE 2 2 2
CAPITAL, INFRASTRUCTURE FUNDS
INSTITUTIONAL INVESTORS 1 1 1
PUBLIC 143 151 147
NATIONAL DFIS 70 64 67
MULTILATERAL DFIS 44 48 46
BILATERAL DFIS 15 22 18
GOVERNMENTS & AID AGENCIES 12 14 13
CLIMATE FUNDS 2 2 2
TOTAL 342 392 367
The World Bank has for quite some time been an important actor in development finance
across SSA, and has based on this progressing engagement to assume a focal part in
climate finance in the region. UN agencies have also been dynamic, not directly through
the UN REDD program, but rather through UNDP engagement at the nation level and
through UNIDO endeavors to draw in nations on access to energy for industrial purposes.
Bilateral donors including the UK, Norway, and Germany are assuming a critical part in
the region. Germany, through the International Climate Initiative (ICI), disbursed $56
million to 23 projects in SSA. The UK and Norway were instrumental in their help in
setting up the CBBF. Endeavors have been made to engage African leaders in the
international process for outlining the international architecture of climate finance.
Ethiopian President Meles Zenawi co-led the UN High Level Advisory Group on Climate
Change Finance in 2010, together with Norwegian Prime Minister, Jens Stoltenberg.
Similarly, South Africas former Minister of Finance and present Minister of the
Planning Commission, Trevor Manuel, co-led the Transitional Committee on the outline
of the Green Climate Fund (GCF), whose proposal will be affirmed by the COP17 in
Durban. Nevertheless, the capacity of African countries to engage with the global
negotiations process on climate finance has been moderately restricted as a result of
inadequate capacity and budgetary requirement, reflected in part in the small size of their
delegations to the UNFCCC.
The World Bank evaluates that between 2010 and 2050, the annual cost for adaptation to
climate change in SSA will be at least $18 billion, not including funding necessary to put
SSA countries on a low-carbon development pathway. While such financial estimates
have been the subject of much debate, there is a general agreement that the level of
financing currently reaching African countries is nowhere near enough to meet
demonstrated needs, especially for immediate adaptation measures. The Climate Funds
Update (CFU) website reports that an aggregate of $1.16 billion1 has been affirmed for

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SSA, of which only $3792 million has been disbursed to date. The huge hole between
funding approved and funding spent on projects suggests serious bottlenecks in program
implementation. The top beneficiaries of dedicated climate finance initiatives in SSA are
South Africa ($488 million), Mozambique ($30million), the Democratic Republic of the
Congo and Tanzania (with $25 million each).Many poorer countries appear to have been
neglected by international climate finance support. For example, Uganda and Chad
consolidated received less than $0.5 million over the last three years from dedicated
climate funds monitored by CFU.
Decisions adopted by the COP perceive that in order for developing countries to meet
their responsibilities regarding climate change mitigation and adaptation, developed
countries must meet their obligations to provide the necessary financial resources and
technology transfer. The 2009 Copenhagen Accord portrays the collective commitment,
affirmed by the Cancun Agreements, by developed countries to provide new and
additional resources approaching 30 billion dollars for 201012, expanding to 100 billion
dollars every year by 2020. Different estimates of developing country climate finance
needs range from annual investment of 177-695 billion dollars for mitigation and 71-81
billion dollars for adaptation. For Africa alone, the estimates are about 18 billion dollars
per year 4 for mitigation and 20 30 billion dollars 5 per year for adaptation when
including Africas current adaptation deficit. A comprehensive annual inventory of global
climate finance during 2012 shows that at around 359 billion dollars or roughly 1 billion
dollars per day -- far below even the most conservative estimates of investment needs.
The inventory calls for incentives for the private sector to significantly accelerate its
investment in low carbon and climate resilient growth options. In its annual review,
Landscape of Climate Finance 2013, the Climate Policy Institute estimated 353 billion
dollars was spent on climate finance globally. Fully 95 percent of this was spent on
mitigation but only half of the total expenditure was spent in developing countries. Least
developed and most vulnerable countries demand that public sector contributions by
developed countries should make up the bulk of financial commitments. Developed
countries on the other hand accentuate the significance of mobilizing private financing.

Figure 3: Breakdown of Finance Sources into Mitigation and Adaptation

uses (USD Billion)

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The dominant part of dedicated climate funds are dispensed through multilateral
channels. Distinctive nations will contribute to such funds, among which are: the Global
Environment Facility (GEF) - an operating entity of the financial mechanism of the
UNFCCC that operates the Least Developed Countries Fund (LDCF) and the Special
Climate Change Fund (SCCF), which bolster adaptation plans and projects, and the
Climate Investment Funds (CIF) administered by the World Bank in association with
regional development banks. These include the African Development Bank, the Asian
Development Bank, the European Bank of Reconstruction and Development and the
Inter-American Development Bank. Funds channelled through the World Bank are
mainly for mitigation plans and programmes. In some cases, multilateral funds go
specifically into a developing countrys National Climate Change Fund. An example is
Brazil, where the Amazon Fund is managed by the countrys National Development
Bank and governed by a committee of Brazilian government, civil society and private
sector representatives. According to Climate Funds Update, an initiative founded from a
partnership between the Heinrich Bll Foundation (HBF) and the Overseas Development
Institute (www.climatefundsupdate.org), as of October 2013 European countries have
been the biggest contributors to multilateral climate funds, delivering 3.4 billion dollars
since 2008. Most of the finance was made available as grants offered to countries on a
concessional basis, with the potential to help meet the additional costs of investments in
climate change. After Europe, the US and Japan have committed to the largest pledges.
Bilateral climate finance makes up a large share of financing and includes funding
through direct projects with private sector sources. An illustration is Germanys
International Climate Initiative (ICI) for adaptation and mitigation. Some of the funds
channelled through ICI are obtained from the sale of national tradable emission
certificates. Norway and Australias bilateral funds have predominantly been focused on
REDD+ projects through national trust funds.

Figure 4: Composition of various Climate Change Funds

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Table 3: Estimated North-South climate finance in 2013 and 2014 using
the Landscape methodology (USD billion)

UPDATED 2013 UPDATED 2014 Average

NUMBERS NUMBERS
MULTILATERAL DFIS 10.5 16 13.2
BILATERAL DFIS 12.3 17.5 14.9
CLIMATE FUNDS 1.9 1.5 1.7
GOVERNMENT AND AID 8.2 7.5 7.9
AGENCIES
EXPORT CREDITS 0.5 0.3 0.4
PRIVATE CLIMATE FINANCE 2.2 to 24.8 3.6 to 21.2 2.9 to 23
TOTAL 35.4 to 58 46 to 64 41 to 61.1

Most climate funds are moderately new, although the Global Environment Fund (GEF)
has been around since 1991. Among the most recent is the Green Climate Fund (GCF),
intended to be the primary channel for climate finance. The bulk of climate finance is for
mitigation with South Africa being the top beneficiary in sub-Saharan Africa and among
the top 20 beneficiaries globally, following closely behind Mexico in second place.
Funding approvals for mitigation for South Africa have mostly gone into the largest
approved project in the region -- the Eskom Renewable Energy Support Program (US$
350 m). In North Africa, approvals are concentrated in Morocco (nearly 60%) and Egypt
(about 33%). Most of this finance has been made available as concessional loans for
mitigation activities. Adaptation is the abrogating need for Africa as a whole, for Small
Island Developing States (SIDS) and Least Developed Countries (LDCs) generally.
Regional distribution for adaptation favours sub-Saharan Africa (38%), followed by Asia
and the Pacific (26%) then Latin America and the Caribbean (11%). Top beneficiaries in
Africa are Niger and Mozambique.
As of late, there has been a deferral in funds from the Climate Vulnerability Forum
(CVF) which met in Paris in 2015. Additionally, the United State, a noteworthy supporter
to Climate financing has reported its choice to pull back from the Paris climate accord as
well as stop contributing to the Green Climate Fund- a unique global initiative to react to
climate change by investing into low-emission and climate-resilient development.

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Figure 5: Contributions of Various Countries to the Green Climate Fund

Source: Green Climate Fund

Green Climate Fund was set up by 194 governments to limit or reduce greenhouse gas
emissions in developing countries, and to help adapt vulnerable societies to the
unavoidable impacts of climate change. Given the urgency and seriousness of the
challenge, the Fund is mandated to make an ambitious contribution to the united global
response to climate change. However, the withdrawal of the United State from
contributing to GCF will be more challenging to Countries prone to massive flooding,
long drought and extreme weather that scientists have connected to a changing climate.
Although a few reasons were ascribed to the to the decision, nonetheless, it is highly
imperative to sustain climate financing as this will go a long way in ensuring a tranquil
determination of problems related with climate change.
African nations have been vocal promoters of direct access to climate finance, which may
help diminish the transaction costs associated with projects that presently involve a large
number of intermediaries. Direct access, however, requests that national institutions have
the capacity to meet fiduciary standards and manage and spend this money well. A
noteworthy advancement of the AF was to give institutions based in developing countries
direct access to financing for projects through National Implementing Entities (NIEs).

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Senegal, Benin and South Africa have all established NIEs. Senegal was the first to seek
direct access, and appointed an NGO experienced in coastal resource management to act
as its designated NIE. This innovation demonstrates the important role that NGOs can
and are playing in helping to access and manage climate change finance, particularly on a
continent where governments institutional capacity is often limited. Nevertheless,
strengthening institutional capacity within governments in SSA will be essentially vital to
build resilience to the impacts of climate change over the longer term.
The African Development Bank (AfDB) is a noteworthy player in climate finance in
SSA. It is an implementing partner in the Climate Investment Funds (CIFs) together with
the World Bank, administers the Congo Basin Forest Fund (CBFF), and hosted the
Partnership Forum showcasing the achievements of the CIFs in South Africa in June
2011. The AfDB has assumed an inexorably conspicuous part in international processes
to mobilize global climate finance, as its President, Donald Kabureka, was appointed to
the High Level Advisory Group on Climate Change Finance in 2010. Over the past year,
the AfDB has proposed a different Africa Green Fund, as an approach to deal with the
current lack of climate finance on the continent, with some support from a number of
African governments and regional institutions such as the African Union. The
relationship of such a Fund with the future GCF is unclear. This development warrants
reflection in light of the status of climate-related policies, sector strategies and
implementation capacities at the AfDB. The AfDB is still in the earliest stages of
consolidating climate risk into its portfolio and has yet to operationalise a long overdue
Climate Risk Management and Adaptation Strategy. Although its lending for renewable
energy and energy efficiency is expanding, a detailed review of its energy investments
from 2004 to 2010 suggests that 80% of its energy portfolio has supported conventional
fossil fuel power. The AfDBs largest loan to date was $2.5 billion to Eskom for the
4,000 MW Medupi supercritical coal fired power plant in South Africa, co-financed with
the World Bank.
Furthermore its energy portfolio is concentrated in richer member countries (mainly
South Africa, Egypt, Morocco and Tunisia), with only 25% of its energy lending
coordinated to poor countries, principally for transmission and distribution projects. The
AfDB is in the process of drafting a new energy sector policy and strategy which
acknowledges the need to transition to clean energy solutions by 2016 and to expand
access to energy for the poor. Nevertheless concerns have been raised about proposed
new investments in coal-fired power plants, export-oriented biofuel projects, and large
hydropower, which would be permitted under the new strategy, and could pose serious
environmental and social problems. The AfDB has started to build up a new integrated
safeguards system, as the environmental and social safeguard provisions it presently uses
are weaker than those of other MDBs. It is also poised to revise its disclosure policy,
which is also less comprehensive than those in place at other MDBs at present. A new
Strategic Gender Plan of Action will be created in 2012. These initiatives suggest that the
AfDB is is very much aware of the need to integrate climate considerations into its
operations. Improving its policies and performance will be essential if it is to be
depended with managing a large portion of the multilateral climate funding for SSA.

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Forests and woodlands occupy more than 20% of the land area in Africa, especially in
Central Africa where the Congo Basin holds the worlds second largest continuous block
of tropical rain forest. Climate Funds Update (CFU) data reports show about 40 projects
in SSA, 10 of which have been approved in 2011 for a total committed funding of $119
million. Funds have been disbursed for 32 of these projects for a total amount of $47
million. The main dedicated funding initiative in the region is the Congo Basin Forest
Fund (CBFF). The CBFF, which is managed and implemented by the AfDB, supports
relatively small-scale projects that range from promoting land tenure rights, to
incentivizing innovative forms of community controlled protected areas. Some 13
projects for a total amount of $14 million are currently being implemented under the
fund. The Forest Investment Program (FIP) of the World Bank CIFs has committed the
largest amount of finance to REDD+ in Africa to date. A $32 million FIP program in
Burkina Faso was approved in 2011, which will support the decentralization of
sustainable forest management, the protection of state forest reserves, and information
sharing. In addition, a $60 million program was endorsed for the Democratic Republic of
Congo to address deforestation and degradation and provide small grants to promising
small-scale initiatives. A FIP investment plan for Ghana is also under development. The
World Banks Forest Carbon Partnership Facility (FCPF) is actively engaged in the
region, with 8 projects approved and 7 disbursed, but has very limited resources with a
budget of less than $1 million per project. Finally, the UN-REDD Programme is working
with Tanzania, the Democratic Republic of the Congo, and Zambia, and has disbursed
$13 million for the preparation and implementation of National Programs with the
technical support of the Food and Agriculture Organisation, the UN Environment
Programme, and UN Development Programme .

Figure 6: key programs of Climate Investment Fund

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Like every other country in the world experiencing climate variability, Nigeria is not an
exception as there is prolonged dry spells leading to grave drought in the northern part of
the country and chaotic floods ravaging the South of Nigeria. The effects of climate
change are unbiased as it affects the rich, poor, young, old, women, children and men. As
this continues, the need has emerged for mitigation in order to reestablish the earth to its
near original state of clemency, but this will not be without a cost or a price to
pay.Currently, Nigeria has leveraged 63 million USD of multilateral funds for climate
change projects according to Overseas Development Institute. This is less than what
Nigeria needs to reinforce its fight against climate change considering Nigerias level of
GHG emissions, its vulnerability to the effects of climate change, as well as a number of
funds leveraged to developing countries as a whole. Nigeria requires about 140 billion
USD to tackle climate change and the measures for adaptation to climate change already
incorporated into climate systems could cost between 0.7 and 1.2 billion USD per year
for the next 40 years. The costs of tackling climate change in Nigeria will be critical as
the effect of of climate change could increase poverty to about 100 million persons in
2030 according to World Bank.
However, Nigeria has taken the bull by the horn amidst these difficulties by choosing to
look inwards.. By opting to the Paris Agreement, Nigeria has acknowledged and initiated
the issuance of the green bond (as at July 19, 2017) as an alternative and innovative
channel of raising climate finance. This demonstrates that Nigeria has officially keyed in
and commenced participation in the Climate Finance Accelerator (CFA) Initiative, which
is the action plan articulated by the Nigerian government to execute its commitments on
climate change. So, this initiative is an innovative approach targeted at fast tracking the
funding of the countrys Nationally Determined Contributions (NDCs).The objective of
this initiative is to articulate initial financial solutions for the most important climate
change projects and figure out the larger measures, including financial and human
resources required to bring the projects into reality. The CFA initiative will host a five-
day professional workshop in London precisely in September 2017, which will converge
Nigeria, Vietnam, Mexico, and Colombia together in association with green finance
professionals to articulate descriptions for executing NDC financing decisions.
A major hindrance to investment in climate finance is the transaction costs of small-scale
projects that are often required in the poorest regions and for the advantage of the
poorest, most vulnerable population groups, such as women and Indigenous Peoples. It is
an immense challenge to design and implement programs in ways that are financially
viable, and can also be scaled-up and replicated. This challenge is further intensified by
the poor investment climate in many African countries, the aforementioned weak
capacity of government institutions to manage finance, political instability and
governance problems. However, some efforts have been made to help direct investment
to these smaller scale projects. For example, the Economic Community of West African
States (ECOWAS) established a fund to purchase carbon credits upfront to provide start-
up capital for domestic small and medium sized enterprises and NGOs. The Central
African States Development Bank (BDEAC) has created similar instruments to
encourage access for CDM project developers to access funding. Nevertheless, even with

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increased private sector involvement in small-scale projects in SSA, a large and sustained
contribution of public sector grant financing in the region will be essential. This is
especially valid for climate action needs that will not provide a financial return on
investment, but instead produce significant intangible gains in the form of environmental,
developmental and social, including sex, co-benefits.
Generally, Nigeria has not been as effective as many other developing countries in
accessing available international resources to help meet these needs. A lack of
understanding of climate finance funding opportunities; difficulties in crafting concept
notes and applications that reflect the requirements of providers; and challenges in
coordinating activities across the government so as to present a rational vision of
Nigerias climate finance priorities have all held back climate finance flows. Not all
financing goes towards real mitigation or adaptation. According to climatemarkets.org,
the 30 billion dollars pledged for fast-start finance at the Copenhagen climate
conference in 2009 includes everything from multimillion dollar loans to coal-fired
power stations in Indonesia, oil refineries in Brazil, subsidies for maritime border security
in Yemen and Tunisia, and Coca-Cola bottling plants in Nigeria
Financing climate change is the major challenge of Africa. Larger part of the nations
affected by climate change often address the problem with funds from private investors,
international donors or support from developed countries. The climate fund from the
Paris agreement in 2015 is yet to be remitted to affected countries. This situation calls for
a critical appraisal of dangers inherent in lack of climate financing to threat prone areas.
The numerous conditions attached to climate funds make them difficult to access, while
countries in the continent are crying for funding; the developed countries are claiming
that they are supporting the continent financially to tackle the challenge. We need this
environmental fund so much to meet the challenges of climate change.
To combat climate change, countries around the globe would have to acknowledge
climate financing as very essential. Although actual costs cant be anticipated with
precision, cost estimates like the ones from the Intergovernmental Panel on Climate
Change and International Energy Agency do have an essential part: they can tell
policymakers what to concentrate on. Climate negotiators have known for some time that
acting quickly is important, and reports make this even clear by showing just how much
delays can add to costs. Hence Nigeria need to seek an alternative to financing its
climate, all the tiers of government needs to meet, discuss and strategize ways to secure
funds domestically from both private and public sources combined with funds provided
by the government. Another strategy to secure climate funds locally is to create an
awareness to public on the shortage of climate funds from the international climate
finance and its implication on the nation, hence sensitizing the public (illiterate and
literate) in various local languages about the consequences of their actions on the climate
will go a long way in keeping the Sub-Saharan Africa alive. There is the need to
effectively quantify the ecological footprints of individuals or organizations in terms of
monetary cost and such should be compelled to pay. Also, efforts that contribute to
mitigation of climate change should be remunerated also. The government needs to be

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transparent on how the donated climate funds are spent with general public fully
informed.
Lastly, Government establishments ought to likewise build their level of sense of duty
regarding climate financing and protection so as to cover for the adaptation gaps that
have influenced the capacity of individuals to adapt with climate change throughout the
years. This could be done by funding detailed research projects on climate change so as
to better enlighten on effective environmental governance.

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References

Brown, J. and Bird, N. (2009) Financing Climate Change to Support Mitigation and
Adaptation Actions in Africa: Key Issues and Options for Policies in Negotiations
Report, ODI.

EACC (2010) The Economics of Adaptation to Climate Change World Bank.

Heinrich Bll Foundation South Africa. (2011). Perspectives. Special Issue on Climate
Finance for Africa Climate Funds Update: http://www.climatefundsupdate.org/

http://blogs.worldbank.org/climatechange/reaffirming-our-commitment-carbon-pricing-
and-climate-action

http://climatechange.gov.ng/climate-finance/

http://climatechange.gov.ng/coordination-and-climate-finance-in-nigeria/

http://thenewsnigeria.com.ng/2017/08/climate-financing-in-nigeria-who-pays-for-our-
climate/

http://www.environewsnigeria.com/responsible-climate-financing-nigeria/

http://www.worldbank.org/en/topic/climatefinance

https://nnn.com.ng/nigerianews/tribune/paying-for-our-climate-in-nigeria/

https://www.sunshineherald.news/%E2%80%8Bpaying-for-our-climate/

https://www.vanguardngr.com/2017/07/paying-climate-tax-tool-mopping-finance-
building-resilience/

Read more at: https://www.vanguardngr.com/2017/07/paying-climate-tax-tool-mopping-finance-

building-resilience/

Tamufor, L., Klemm, J. and Schalatek, L. (2011) Ready to be Africas Climate Bank? A
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Bank Report, Bank Information Center/Heinrich Bll Stiftung.

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