Nigeria, Africa’s most populous nation and largest economy, stands at the crossroads of an escalating climate crisis. With rising temperatures, erratic rainfall, and increasing desertification in the north, the country faces heightened risks of food insecurity, water shortages, and biodiversity loss. Coastal cities like Lagos grapple with frequent flooding due to sea level rise, threatening millions of livelihoods. In contrast, the arid north endures prolonged droughts, intensifying conflicts over land and resources.

The energy sector is still a key driver of both emissions and economic activity, with over 80% of Nigeria’s energy still coming from fossil fuels. However, the country has made bold commitments under its Nationally Determined Contributions, aiming to achieve net-zero by 2060 and increase renewable energy’s share in electricity generation to 30% by 2030. Off-grid solar solutions are gaining momentum, offering a path to energy access for rural communities, while ambitious policies like the Energy Transition Plan and Renewable Energy Master Plan seek to transform the sector. Yet, challenges such as policy inconsistencies, limited private-sector investment, and weak enforcement mechanisms continue to hinder large-scale climate action.

Unlocking new avenues for climate investment

Nigeria’s climate finance landscape is a mix of ambition and constraints. While the country requires an estimated $10 billion annually to meet its climate targets, current funding falls significantly short. A blend of domestic resources, international grants, private-sector investments, and carbon financing is being used to bridge the gap, but challenges remain in accessing and deploying these funds effectively.

The Nigeria Sovereign Green Bond, launched in 2017, was a pioneering step in mobilizing domestic climate finance, funding key projects in renewable energy, afforestation, and sustainable transport. Internationally, Nigeria has benefited from climate funds such as the Green Climate Fund, Global Environment Facility and Climate Investment Funds. However, bureaucratic hurdles and slow disbursement of funds have limited their impact.

To unlock more climate finance, Nigeria is focusing on carbon markets and blended finance models that combine public and private funding. The recent push towards carbon credit frameworks aims to create incentives for emission reductions while attracting foreign investment. Additionally, initiatives like the Energy Transition Plan’s $1.9 billion funding strategy and the Nigeria Infrastructure Fund’s renewable energy investments highlight efforts to scale up financing.

Despite these efforts, key challenges remain in ensuring that climate finance is transparent, accessible, and aligned with national development priorities. Strengthening governance, improving financial instruments, and fostering investor confidence will be crucial in driving climate action at scale.

Recognising the need for stronger financial mobilisation, Nigeria has engaged in the Parliamentarians for Climate Finance project. It promotes parliamentary leadership in unlocking climate finance, advancing policy reforms, and aligning financial flows with national climate objectives. By involving lawmakers, financial institutions, and development partners, the project is helping to build an enabling environment for green investment and more effective climate governance.