AF backs first BOI project in $98.8m climate finance deal

The Adaptation Fund Board has endorsed its first project submitted by Nigeria’s Bank of Industry (BOI), marking a significant development in the country’s efforts to mobilise international climate finance through public development banks.

The endorsement came as the Board approved $98.8 million in new climate adaptation projects at the close of its 47th meeting on October 23, 2026, while setting a target to mobilise at least $1.2 billion between 2026 and 2029 to respond to growing demand for adaptation funding. The approval of the Nigerian institution’s proposal represents an expansion of collaboration between the Adaptation Fund and public development banks, potentially strengthening the role of domestic financial institutions in delivering climate adaptation interventions.

However, the Fund’s announcement did not disclose the amount allocated to the Bank of Industry project, its specific objectives or the Nigerian communities and sectors expected to benefit. The development comes amid growing concerns over the impacts of climate change on developing countries, particularly those facing increasing exposure to flooding, drought, food insecurity and other climate-related hazards.

For Nigeria, where climate risks threaten agriculture, infrastructure, livelihoods and economic development, access to adaptation finance is critical to strengthening resilience and protecting vulnerable communities. The Bank of Industry, a Nigerian public development finance institution, provides financing and support to businesses across productive sectors of the economy. Its involvement in the Adaptation Fund’s project portfolio could create additional opportunities to connect development finance with climate resilience priorities. The Fund’s decision also highlights the growing importance of diversifying the institutions through which international climate finance reaches developing countries.

According to the Adaptation Fund, its active project pipeline has reached nearly $2 billion, reflecting record demand for financing as global temperatures continue to rise and the world faces the prospect of exceeding the 1.5-degree Celsius warming threshold. The Board responded by establishing a resource mobilisation target of at least $1.2 billion for 2026–2029, supported by an action plan to engage both sovereign and non-sovereign contributors.

It also called for the Fund’s transition to serve the Paris Agreement to be finalised at the 31st United Nations Climate Change Conference (COP31), scheduled to take place in Antalya, Türkiye, from November 9 to 20, 2026. The transition is expected to open access to an additional source of climate finance through a five per cent share of proceeds from carbon credits generated under Article 6.4 of the Paris Agreement.

Article 6.4 establishes a United Nations-supervised mechanism through which countries and other eligible participants can generate and trade carbon credits from activities that reduce greenhouse gas emissions. The proposed share of proceeds would provide a dedicated funding stream to support adaptation in developing countries, helping diversify the Fund’s resources beyond voluntary contributions. Ali Daud Mohamed, Chair of the Adaptation Fund Board, said the transition would enable the Fund to enhance and diversify its resources while expanding support for vulnerable communities.

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