African continent most vulnerable to climate risks — AfDB
The African Development Bank (AfDB) Group reiterates that the African continent was one of the world’s most vulnerable to climate risks.
In a statement on its website on Tuesday, the bank said Africa was the least among continents that polluted the planet.
The statement noted that nations across the continent were grappling with financing constraints.
“Thus, resources from the international private sector, including multilateral development financiers such as the AfDB, are helping to catalyse climate action and green growth.
“For AfDB, greater involvement of the private sector is crucial to closing the gap in climate finance flows into Africa, which until recently, was dominated by non-private actors.
“For example, of the $29.5 billion invested in African climate finance in 2020, only 14 per cent was from private actors,” the statement said.
According to the statement, this is significantly lower than comparable regions like Latin America and the Caribbean (49 per cent), East Asia and the Pacific (39 per cent) and South Asia (37 per cent).
It said these limited funds covered several African countries with relatively developed financial markets, such as South Africa, Nigeria, Kenya, Morocco, and Egypt, which attracted $4.2 billion.
“It is why the Bank Group has mobilised private sector financing for climate and green growth the centrepiece of its 2023 Annual Meetings scheduled for 22-26 May in Sharm El Sheikh, Egypt.
“The meetings will discuss successful strategies to galvanise more resources, including within Africa, and investment opportunities in renewable energy and sustainable agriculture.
“The Bank’s Governors, representing its shareholders, will be joined by global experts and development financiers, to deliberate on a new architecture for mobilising resources for sustainable investment in Africa,” it stated.
The statement said the experts would consider how to make African countries’ rich natural capital to finance climate and green growth.
It further said that about a dozen Heads of State and Governments were expected to attend.
It said, “The AfDB believes there is much potential for climate finance in Africa to increase. The bank bases its view on a dataset of global private resources.
“Private equity funds under management was $6.3 trillion in 2021, while global pension fund assets in the 22 largest markets hit a new high of $56.6 trillion by late 2022.
“To combat climate change and support green growth, African countries need more climate investments to achieve their national targets for emissions reductions and adaptation to the impacts of climate change.”
According to the statement, AfDB, the continent’s premier multilateral development finance institution, has begun providing solutions.
“It is implementing mechanisms to facilitate and channel access to global climate finance, particularly from the private sector.
“It has also inaugurated programs to mitigate risks and barriers to private sector participation in climate finance and green growth in Africa.
“The Bank has committed to mobilise $25 billion by 2025, representing 41 per cent of its total funding commitments,” it said.
The statement said one of the Bank’s works was the Sustainable Energy Fund for Africa, whose objectives aligned with AfDB’s High Five strategic priorities.
It said this particularly applied to the “Light up and Power Africa” and “Improve the Quality of Life for the People of Africa.”
It explained that this facility provided technical assistance and concessional finance instruments to remove market barriers.
“In 2022, for example, Togo benefitted by nearly $4 million, while in January 2023, SEFA provided a $1 million grant for green mobility in Africa to seven countries.
“The counties are Kenya, Morocco, Nigeria, Rwanda, Senegal, Sierra Leone and South Africa. Still, AfDB believes it can go further,” it added.
