The minister said climate change financing is necessary because the government needs cheaper and free funding.
The federal government is considering exploring Loss and Damage funds committed at the 28th United Nations Conference of the Parties (COP28) in Dubai, UAE, for climate-vulnerable communities.
The Minister of Finance and Coordinating Minister for the Economy, Wale Edun, disclosed this on Tuesday during a stakeholder interaction on the 2024 Appropriation Bill, in Abuja.
Mr Edun said the climate change financing is necessary because the government needs cheaper and free funding.
He noted that the country's fiscal space is exhausted.
"Nigeria's fiscal space is exhausted. We have to focus on concessional funding, the cheaper funding, even free funding and climate financing are the way.
"Just yesterday UAE announced 30 billion dollars for climate action. What that means is that as we look to fund the N27.5 trillion budget this year, our first point of call must be the cheapest and the most concessionary financing including climate financing," Mr Edun said.
The minister explained that the climate change funds will also help the country to reduce debt servicing.
"We have to be brave, courageous, innovative to make sure that we use the financial market to take the stress down, to reduce our debt servicing, to reduce our emphasis on borrowing," he said.
At the ongoing COP28 in Dubai, many developed countries have committed Loss and Damage Funds for countries vulnerable to climate change.
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The United Arab Emirates (UAE) which is the COP28 host country and Germany pledged $100 million each.
The United Kingdom pledged $40 million to the Fund and £20 million for other funding arrangements for Loss and Damage. The U.S. and Japan pledged $17 million and $10 million respectively.
The Senate President, Godswill Akpabio, agreed with the position of the minister.
Mr Akpabio said Nigeria will not achieve much unless the revenue generation increases.
He urged the federal government agencies to block all revenue leakages and ensure that there is an increase in the revenue of the country.
"No matter how beautiful the budget is, if there is no money to spend, the budget will not work. Let us get up and block the loopholes of leakages and wastages and then bring more revenue so that the 2024 budget becomes realistic", Mr Akpabio said.
The senate president also assured that the two chambers of the National Assembly will sustain the January-December budget cycle.
