FG moves to unlock domestic finance for carbon markets, says 25 Letters Of authorisation Issued

The Federal Government says unlocking domestic finance is key to scaling Nigeria’s carbon market, stressing that communities cannot wait years for international validation to fund climate projects.

This was stated in Abuja at a stakeholders’ workshop convened under the Policy and Regulatory Innovations for Scaling Markets (PRISM) Nigeria Initiative.

PRISM Nigeria is a policy and regulatory engagement programme implemented by the Clean Cooking Alliance (CCA) in partnership with the Nigeria Off-Grid Market Acceleration Programme (NoMAP) and the Global Off-Grid Solar Association (GOGLA).

It is being delivered in collaboration with the Office of the Senior Special Assistant to the President on Climate Finance and Stakeholder Engagement and the Nigerian Alliance for Clean Cookstoves.

The initiative seeks to integrate carbon markets into Nigeria’s domestic financial system so that carbon-linked revenues can be recognised as a credible, investable asset class.

The goal is to unlock local capital for clean cooking, Distributed Renewable Energy (DRE), and nature-based projects across the country.

Delivering the keynote address, Mr. Ibrahim Shelleng, Senior Special Assistant to the President on Climate Finance and Stakeholder Engagement, described the workshop as strategic and timely.

He said Nigeria must now move from years of policy development into implementation.

“Domestic finance brings ownership, and it brings speed,” Shelleng said.

“Our communities cannot wait two to three years for international validation processes, we must look inward to raise the finance our climate projects need.”

He said that climate finance was often mistaken for only international funding, saying that it refers to any funding, domestic or international, directed at mitigation and adaptation.

Mr. Michael Ivenso, Director of Energy, Transportation and Infrastructure at the National Council on Climate Change (NCCC), said carbon markets present a significant opportunity to finance Nigeria’s clean cooking transition, with potential to impact about 45 million people by 2030.

Ivenso said for carbon credits to attract investment, they must be structured as recognised tradable financial instruments. He called for stronger participation from domestic financial institutions, adding that development finance institutions have a critical role in growing the market.

He disclosed that since May, Nigeria has issued 25 Letters of Authorisation (LoA), a sovereign instrument that enables the monetisation of carbon assets.

According to him, a credible and transparent monitoring, reporting, and verification (MRV) system will be essential to ensure the integrity of carbon assets and build investor confidence.

“Every tonne of emissions reduced must be accurately measured and verified,” he added.

Through research, regulatory mapping across Kenya and Nigeria, and extensive consultation, PRISM has identified 15 priority regulatory interventions for Nigeria.

The reforms target key financial regulators including the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), the National Insurance Commission (NAICOM), and the National Pension Commission (PenCom), alongside relevant ministries and market institutions.

PRISM Nigeria builds on a successful first phase in Kenya, where engagement with financial regulators opened dialogue on recognising carbon revenues within banking, capital market, pensions, and insurance frameworks.