Nigeria’s Bank of Industry (BOI) has received its first project endorsement from the Adaptation Fund Board, opening a new avenue for the country to access international climate adaptation finance through a public development bank.

The endorsement was announced as the Board approved $98.8 million for new climate adaptation projects at the conclusion of its 47th meeting on October 23, 2026. The Fund also established a target to mobilise at least $1.2 billion between 2026 and 2029 to meet rising demand for adaptation funding.

The approval expands cooperation between the Adaptation Fund and public development banks, highlighting the potential role of domestic financial institutions in delivering climate resilience interventions.

However, the Fund did not disclose the amount allocated to BOI’s project, its specific objectives or the Nigerian communities and economic sectors expected to benefit.

The development comes as developing countries face mounting climate threats, including flooding, drought, food insecurity and other climate-related hazards. In Nigeria, these risks threaten agriculture, infrastructure, livelihoods and economic development, making access to adaptation finance important for strengthening resilience and protecting vulnerable communities.

BOI is a Nigerian public development finance institution that provides funding and support to businesses across productive sectors of the economy. Its inclusion in the Adaptation Fund’s project portfolio could create opportunities to align development financing with national climate resilience priorities.

The decision also reflects efforts to broaden the institutions through which international climate finance reaches developing countries.

The Adaptation Fund reported that its active project pipeline had grown to nearly $2 billion, representing record demand for funding as global temperatures rise and the world faces the possibility of exceeding the 1.5-degree Celsius warming threshold.

In response, the Board adopted a resource mobilisation target of at least $1.2 billion for 2026–2029, supported by an action plan to engage sovereign and non-sovereign contributors.

The Board also called for the Fund’s transition to serving the Paris Agreement to be finalised at the 31st United Nations Climate Change Conference (COP31), scheduled for November 9–20, 2026, in Antalya, Türkiye.

The transition is expected to provide access to an additional climate finance stream 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 that allows countries and other eligible participants to generate and trade carbon credits from activities that reduce greenhouse gas emissions. The proposed share of proceeds would create a dedicated funding source for adaptation projects in developing countries, reducing the Fund’s reliance on voluntary contributions.

Ali Daud Mohamed, Chair of the Adaptation Fund Board, said the transition would help the institution diversify and increase its resources while expanding support for vulnerable communities.

“The Adaptation Fund Board underscored the urgency of the Fund’s Transition to the Paris Agreement at COP31,” Mohamed said.

He added that the transition would enable the Fund to receive a five per cent share of proceeds from carbon credits.

“The Adaptation Fund turns these resources into support for vulnerable communities to adapt, protecting life’s and livelihoods, and enhancing resilience and food security,” he said.

Mohamed also highlighted the growing demand for the Fund’s assistance as climate impacts intensify.

To guide its future operations, the Board directed the Adaptation Fund secretariat to begin developing a new medium-term strategy covering the next five years.

Mikko Ollikainen, Head of the Adaptation Fund, said the strategy would help the institution respond to changing climate risks, evolving political priorities and the widening gap between adaptation needs and available funding.

“After nearly 20 years serving the most vulnerable on the front lines of climate change, we have delivered concrete results and learned a great deal,” Ollikainen said.

“Now we are kicking off work on a new medium-term strategy to guide us for the next five years.”

He said demand for adaptation finance was increasing much faster than available resources, requiring the Fund to evaluate its existing approaches and determine how its operations should evolve.

The proposed strategy is expected to strengthen the Fund’s ability to respond to growing funding requests and improve the effectiveness of its investments.

Africa featured prominently in the latest round of approvals, with several projects targeting countries vulnerable to climate change.

A $30 million project to be implemented by the United Nations Development Programme (UNDP) will support Ethiopia, Kenya and Somalia. The Sahara and Sahel Observatory will implement a separate regional project worth $25.2 million in Chad and Togo.

Other approved African initiatives include $5 million for a large-scale innovation project in Burundi, to be implemented by the United Nations Environment Programme (UNEP), and $4.9 million for a locally led adaptation project in Rwanda, to be implemented by UNDP.

The Burundi initiative builds on an earlier successful pilot, reflecting the Fund’s interest in expanding approaches that have demonstrated potential to strengthen climate resilience.

The Board also approved $4 million for a project in Tanzania to be implemented by the National Environment Management Council, as well as a $500,000 learning grant for the country.

Outside Africa, the approved projects include $14.9 million for an initiative in Tonga, to be implemented by the Pacific Community, and $10 million for a project in Viet Nam, to be implemented by the International Fund for Agricultural Development.

In addition, the Board allocated $4.1 million in Project Formulation Grants to implementing entities to further develop 33 associated project concepts.

According to the Fund, least developed countries were involved in nearly three-quarters of the newly approved projects, while small island developing states also featured prominently in the latest funding round.

For Nigeria, the endorsement of BOI’s proposal creates a new entry point for engagement with the Adaptation Fund. Public development banks can help connect international climate finance providers with domestic investment priorities by using their established financial systems and relationships with businesses and other economic actors.

However, the practical impact of the Nigerian project will depend on its eventual funding allocation, implementation arrangements and expected adaptation outcomes. These details were not included in the Fund’s announcement.

The endorsement comes as developing countries seek more predictable financing to manage climate impacts and integrate resilience into their development plans.

With an active pipeline approaching $2 billion and a new target to mobilise at least $1.2 billion by 2029, the Adaptation Fund is preparing to respond to increasing demand for climate adaptation support.

Its planned transition to serving the Paris Agreement, the proposed revenue from carbon credit proceeds and the development of a new medium-term strategy could expand its capacity to finance adaptation in vulnerable countries.

As preparations for COP31 continue, the Fund’s latest decisions underscore the importance of securing additional resources and broadening partnerships to translate climate finance into practical support for communities facing increasingly severe climate risks.

Source: GGNMedia