Climate Finance and Renewable Energy Performance in Nigeria

This research investigation looked into the association between (climate finance) and the renewable energy effectiveness performance in the Colony Nigeria (over the year 1990-2024). The dependent variable in the study was renewable energy performance and the operationalization of climate finance included climate finance inflows, green bond proceeds, multilateral funding and the private sector investment. An ex post facto research design was used with the use of secondary time-series data from national and international financial and energy databases. The empirical estimation comprised descriptive statistics, Unit root test, Johansen cointegration analysis, and error correction model to estimate the long-run and short-run dynamics. Results showed that climate finance inflows made a significant contribution to the performance of renewable energy, which makes them key to scaling up renewable energy infrastructure. In contrast, green bond proceeds, multilateral funding and private sector investment were positively but statistically insignificantly dependent on the outcome indicating both bureaucratic bottlenecks, regulatory inefficiencies and financing gaps appear to be the prevailing obstacles to the immediate effect of this intervention. Johansen Cointegration results supported existence of a long-run equilibrium relation between the variables and the error correction mechanism showed that there is a meaningful speed of adjustment to long-run equilibrium. The study concludes that improved governance and better financial structures as well as appropriate incentives are required along with stronger institutional capacities in order to achieve maximum contribution of climate finance to Nigeria's transition to renewable energy.