Recommendation 15

We welcome the part the UK Government has played in involving the private sector in climate finance. We also recognise the breadth of support it offers to those wishing to make sustainable investments in Nigeria. However, the picture of multiple focal points and inconsistent policy decisions suggest that there is room for improvement. We heard how changes in Government aid spending had translated to cuts in green infrastructure development investment, putting the UK at a disadvantage. These create yet more uncertainty for investors. To stay competitive and to make rapid progress toward the goals of the Paris agreement, there is scope for the UK Government to streamline its approach: a) We recommend a review of the support of the various DFIs by the Government as well as their methodologies and mandates. Specifically: i) How DFIs can enter the project development process at an earlier stage to provide initial project development funding. ii) How investment risk thresholds for DFIs can be lowered and how to ensure target percentage rates of return can be used to encourage the support of riskier projects. iii) How the time taken to process project proposals can be reduced without compromising due diligence. iv) How the culture of DFIs can be more accessible to the private sector community whilst ensuring positive development outcomes–the desire to maintain a strong link between project outcomes and development outcomes must not present a barrier to the delivery of sustainable projects. b) We recommend that the mandates of enabling UK Government programmes are sufficiently flexible to adjust to the results of feasibility studies and changes in the project design–rather than requiring developers to shift to a different programme; and that investment initiatives which have flexible project funding pots be prioritised. (Paragraph 42) Lagos calling: Nigeria and the Integrated Review 41