By Abbas Nazil
The federal government, financial regulators and climate finance stakeholders have commenced efforts to introduce regulatory reforms aimed at expanding Nigeria’s carbon market, increasing domestic climate financing and attracting investments into clean cooking, renewable energy and nature-based projects.
The discussions were held in Abuja under the Policy and Regulatory Innovations for Scaling Markets (PRISM) Nigeria initiative, a programme designed to integrate carbon markets into the country’s financial system and position carbon-linked revenues as credible assets capable of attracting local investment.
The initiative is being implemented by the Clean Cooking Alliance in partnership with the Nigeria Off-grid Market Acceleration Programme and the Global Off-Grid Solar Association, alongside the Office of the Senior Special Assistant to the President on Climate Finance and Stakeholder Engagement and the Nigerian Alliance for Clean Cookstoves.
Speaking during the engagement, the Senior Special Assistant to the President on Climate Finance and Stakeholder Engagement, Ibrahim Shelleng, said Nigeria must move beyond years of climate policy discussions and focus on practical implementation through increased mobilisation of domestic resources.
Shelleng stressed that climate finance should not depend solely on international funding, arguing that domestic capital must become a major driver of Nigeria’s climate action efforts.
He said local financing would increase ownership and speed up the delivery of climate projects, noting that communities cannot continue waiting for lengthy international approval processes before receiving support for climate initiatives.
The Director of Energy, Transportation and Infrastructure at the National Council on Climate Change, Michael Ivenso, said carbon markets present a major opportunity to mobilise financing for Nigeria’s clean cooking sector, which could benefit about 45 million people by 2030.
Ivenso explained that although carbon credits provide an important alternative source of climate finance, they must be recognised as tradable financial instruments to encourage participation from domestic financial institutions.
He added that development finance institutions would play a significant role in expanding Nigeria’s carbon market by supporting investments and strengthening market confidence.
According to Ivenso, Nigeria’s issuance of 25 Letters of Authorisation since May represents a major milestone in establishing a stronger carbon market framework by enabling the monetisation of carbon assets.
He emphasised that transparent monitoring, reporting and verification systems would be essential to maintaining the credibility of carbon credits and attracting investors.
Research, regulatory assessments and stakeholder consultations conducted in Nigeria and Kenya through the PRISM initiative identified 15 priority regulatory interventions involving key institutions such as the Central Bank of Nigeria, Securities and Exchange Commission, National Insurance Commission and National Pension Commission.
The proposed reforms focus on creating a stable carbon market structure, increasing participation and financial integration, while ensuring proper risk management and financial stability.
Participants at the workshop highlighted four major areas requiring further attention, including the creation of carbon credit-linked bond instruments, incentives for lending to carbon-related projects, integration of carbon credit information into climate risk databases and the inclusion of carbon credits in environmental, social and governance and climate disclosure frameworks.
Rajeev Gupta of the Clean Cooking Alliance stressed that reliable data would be critical to building a strong and sustainable carbon finance ecosystem in Nigeria.
He explained that accurate and consistent data would improve decision-making, increase transparency and provide the foundation needed for growth in the clean cooking and carbon finance sectors.
Stakeholders expressed optimism that the proposed reforms would unlock greater domestic investment, strengthen Nigeria’s carbon market infrastructure and support the country’s broader climate and sustainable development goals.
