Participants highlighted the critical role of innovative approaches to mobilizing
climate adaptation finance in Africa, in a session titled Inclusive Green
Economies - Harnessing Opportunities and Innovative Solutions for Investments
in Climate-Resilient Development in Africa.
The virtual session, oranised by the African Development Bank, began with a
call for sustainable ways for the continent to emerge stronger from the
pandemic. The event was moderated by Emily Ojoo-Massawa. Senior Associate at
the Global Climate Adaptation Partnership.
“The path to a sustainable COVID-19 recovery will therefore require investments
that simultaneously tackle the pandemic and prevailing climate risks while
offering attractive co-benefits,” said Al Hamndou Dorsouma, Manager of Climate
and Green Growth at the Bank.
“The moment for adaptation has come. Interestingly, we have the attention of
philanthropy, private sector and non-traditional investors, who want to invest
in harnessing new opportunities in climate change adaptation,” said Arame Tall,
Senior Adaptation and Resilience Specialist, Climate Change Group at the World
Bank. “We need the ministries of finance to be involved in outlining adaptation
investment opportunities in countries to better harness these opportunities,
including clear investment and sectoral plans.”
With less than 2% of philanthropic funding going to combat climate change,
funders face a challenge. The solution is to collaborate more and in smarter
ways in order to meet ambitious targets and rally support from all sectors,
participants noted, drawing attention to the unprecedented challenge posed by
the COVID-19 pandemic.
“Collaboration is important to lay a solid foundation to achieve a greener
post-COVID future,” said Atsuko Toda, the African Development Bank’s Director
for Agricultural Finance and Rural Infrastructure Development.
She called for a paradigm shift in adaptation financing, stressing the Bank’s
willingness to work with partners to accelerate Africa’s adaptation.
In October 2018, the Bank’s Board of Directors approved a framework for the
implementation of the Africa Disaster Risk Financing (ADRiFi) Programme, which
offers regional member countries an opportunity to pool and transfer their
climate-related risks by paying a sovereign insurance premium. “The payout is
made immediately after a disaster happens,” Toda said. The Bank partners with
the African Risk Capacity Insurance Company (ARC) to implement ADRiFi.
The COVID-19 crisis has underscored the urgency of building healthier, more
inclusive and more resilient economies, the meeting heard.
Lesley Ndlovu, CEO of ARC, noted the need for countries to plan for exposures
and build resilience. “At the African Risk Capacity, we work with countries to
prepare them for the risk exposure they have and help them prepare for how to
respond, including helping them to establish a rainy-day fund. We have also
partnered with the African Development Bank for the Africa Disaster Risk
Financing initiative and other financing instruments,” Ndlovu said.
“We need broader collaborations to solve the problem that our continent faces.
The problem is so big that all of us have a role to play.”
Africa is among the world’s most climate-vulnerable regions, and the economic
cost is high: as much as $15 billion in 2020, rising to potentially $50 billion
by 2040, which is equivalent to 7% of the continent’s GDP.
Al Hamdou Doursouma noted that the Bank is on track to mobilize $25 billion
between 2020 and 2025 to support investments in climate change.
In 2019, the African Development Bank prioritized adaptation finance, with
55% of its climate-focused financing invested in adaptation actions. The Bank’s
adaptation finance rose from $500 million in 2012 to $2 billion in 2019,
cumulatively representing $18.6 billion over this period.
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