Investigating the Barriers to Climate Finance and ESG Integration in Nigeria’s Energy Transition

Nigeria’s Energy Transition Plan (ETP) sets ambitious targets of achieving net-zero emissions by 2060 and universal energy access by 2030. However, realising these goals requires substantial climate finance and robust Environmental, Social, and Governance (ESG) integration. This study investigates the barriers to climate finance mobilisation and ESG adoption in Nigeria’s energy sector using a mixed-methods design. Quantitative data (2010–2023) from multilateral, bilateral, and domestic finance flows were analysed alongside regression tests on the determinants of renewable investments. Qualitative insights were drawn from interviews and focus group discussions with key stakeholders. Findings reveal that macroeconomic instability (exchange rate volatility, high interest rates), weak policy consistency, and superficial ESG adoption significantly constrain renewable energy financing. Domestic financial institutions remain risk-averse, contributing less than 15% of total climate finance inflows, while marginalised communities—mainly rural and women-led groups—are excluded from energy projects. Triangulation of evidence underscores that systemic barriers across finance, governance, and social dimensions are mutually reinforcing. The study concludes that without strengthened domestic financial intermediation, deeper ESG integration, inclusive financing mechanisms, and policy stability, Nigeria’s ETP targets will remain unattainable. Recommendations are offered for policy reform, financial innovation, and inclusive governance.