DBN Launches $275 Million Climate Finance Programme for Nigerian Small Businesses

ANTALYA, Türkiye — The Development Bank of Nigeria has launched a $275 million climate finance programme aimed at helping Nigerian micro, small and medium-sized enterprises invest in cleaner energy, climate-resilient agriculture and other environmentally sustainable business activities.

The initiative, known as the DBN Enterprise Lending for Transition and Adaptation Programme, was launched on the sidelines of the 31st United Nations Climate Change Conference, COP31, in Antalya, Türkiye.

The programme is designed to address the financing difficulties that prevent many small businesses from investing in climate-friendly technologies and adapting to increasingly severe weather conditions.

According to the Development Bank of Nigeria, the programme will combine financing, risk-sharing arrangements and technical assistance to help businesses and financial institutions overcome barriers to climate-related investment.

Supporting Cleaner and More Resilient Businesses

For many Nigerian businesses, energy costs are a major challenge.

Companies that rely heavily on diesel generators face high operating expenses, while businesses in agriculture are increasingly affected by unpredictable rainfall, flooding, drought and other climate-related pressures.

The new programme could help eligible businesses invest in alternatives such as solar energy, energy-efficient equipment and improved irrigation systems.

For example, a small manufacturing or processing company could seek financing for solar equipment to reduce its dependence on expensive diesel-powered electricity.

Agricultural businesses could also benefit from investments in climate-smart technologies designed to help them manage changing weather conditions.

The programme's climate-finance framework includes areas such as renewable energy, energy efficiency, low-carbon transport, waste management and climate-smart agriculture.

$100 Million Contribution From the Green Climate Fund

The $275 million programme is expected to mobilise affordable, longer-term financing for eligible Nigerian MSMEs.

According to the announcement, the programme includes a $100 million contribution from the Green Climate Fund.

Officials said the broader initiative could benefit approximately 1.3 million people and contribute to an estimated reduction of 4.5 million tonnes of carbon dioxide equivalent.

These targets will depend on how successfully the programme is implemented and how many eligible projects ultimately receive support.

DBN Managing Director and Chief Executive Officer Tony Okpanachi said climate change was already affecting Nigerian businesses through unpredictable weather, disruptions to supply chains and rising energy costs.

However, he also said the transition towards cleaner technologies could create opportunities for businesses to improve efficiency, reduce operating costs and strengthen their competitiveness.

Tackling Barriers to Climate Investment

Small businesses often face significant difficulties when seeking financing.

Climate-related investments can require substantial upfront spending, even when they offer long-term savings.

Other barriers include collateral requirements, short loan repayment periods and concerns among financial institutions about the risks associated with newer technologies or climate projects.

The DBN programme is intended to address some of these obstacles through a combination of lending, risk-sharing and technical assistance.

Importantly, eligibility does not guarantee financing. Businesses and projects will still need to meet the programme's climate, credit, environmental and other requirements.

Building Nigeria's Climate Finance Market

The programme is also designed to strengthen the wider climate-finance market in Nigeria.

DBN plans to work with financial institutions to improve their ability to identify and finance viable climate-related investments.

Technical support is expected to help businesses develop stronger, investment-ready projects.

This could be particularly important for smaller companies that have promising ideas but lack the expertise needed to prepare detailed financing proposals.

Government officials have also emphasised that Nigeria cannot depend entirely on public money to finance its climate transition and will need to attract additional private investment and concessional funding.

What the Programme Could Mean for Small Businesses

For eligible Nigerian MSMEs, the programme could open new opportunities to finance projects that reduce energy costs or improve resilience to climate-related risks.

A business could potentially invest in solar power, more efficient equipment, improved water systems or climate-smart agricultural technology.

The programme's long-term success, however, will depend on how accessible the financing becomes and whether businesses can successfully meet the eligibility requirements.

For now, the launch of the $275 million DBN climate finance programme represents a significant new effort to connect Nigeria's small-business sector with financing for cleaner and more resilient operations.

If effectively implemented, it could help thousands of businesses reduce environmental risks while improving productivity and creating new economic opportunities.