AfDB pledges $25 billion to climate finance for 2020-2025

The African Development Bank will double its climate finance commitments for the period 2020-2025, the Bank’s President announced at the One Planet Summit taking place in Nairobi. 
 

Akinwumi A. Adesina said that the Bank would commit at least US$25 billion towards climate finance.

Speaking at a plenary in the presence of Heads of State, including President Uhuru Kenyatta of Kenya, and French President Emmanuel Macron, Adesina also announced the Bank is on course to achieve its target of allocating 40% of its funding to climate finance by 2020, a year ahead.

The Bank’s commitment on the target, the highest among all multilateral development banks, has progressed steadily from 9% in 2016 to 28% in 2017 and 32% in 2018.

Considering Africa’s high vulnerability despite contributing the least to climate change, the African Development Bank has successfully raised its adaptation finance from less than 30% of total climate finance to parity with mitigation in 2018. The African Development Bank will continue this trend into the future.

“The required level of financing is only feasible with the direct involvement of the entire financial sector,” said Adesina. “Consequently, the Bank launched the African Financial Alliance for Climate Change (AFAC) to link all stock exchanges, pension and sovereign wealth funds, central Banks and other financial institutions of Africa to mobilize and incentivize the shift of their portfolios towards low carbon and climate resilient investments.”

The Bank made another milestone announcement. “It is not good enough to simply ask countries to stay away from polluting technologies,” Adesina said. “We have to be proactive in exploring alternatives. We will therefore be launching the ‘green baseload’ facility under the Sustainable Energy Fund for Africa (SEFA 2.0) to provide concessional finance and technical assistance to support the penetration and scale-up of renewable energy, to provide affordable and reliable renewable energy baseload.”

Several donors, including Canada, Denmark, Germany, Norway, Italy, the UK and USAID have indicated their interest in this transformative instrument, which will also help to replace coal. The African Development Bank has played a critical role in building Africa’s clean energy capacities. The Bank’s last investment in a coal project was 10 years ago. Additionally, and in line with its ambitious New Deal on Energy for Africa, 95% of all Bank investments in power generation over the 2016-18 period have been in renewables.

The “Desert to Power” program, a $10 billion initiative to build a 10 GW solar zone across the Sahel—the largest in the world— would provide electricity for 250 million people.  Together with partners such as the Green Climate Fund and the EU, the Bank has now financed the first project under this Initiative: The Yeleen Rural Electrification Project in Burkina Faso.

Key Bank projects include the co-financing of the 510 MW Ouarzazate Solar Complex in Morocco, one of the largest solar complexes in the world.

Campaigners to One Planet Summit ask for real climate solutions for Africa

National and business leaders, as well as prominent figures of youth and civil society, will come together in Nairobi for the One Planet Summit, under the theme of “Africa’s Pledge”. 350Africa and other climate groups will march from the YMCA to the University of Nairobi to call for real climate solutions for the continent.

The much-publicised event has in fact left climate campaigners concerned that the Summit will be another lost opportunity to advance meaningful climate action on the scale and timeline needed to avoid the worst case scenarios of climate change in Africa. 

Kenya President Uhuru Kenyatta will be hosting the 3rd edition of the One Planet Summit, which is convened by French President Emmanuel Macron, with the support of the World Bank and the United Nations.

Officially, the meeting aims to highlight "the unique role of Africa as a global partner facing both challenges and opportunities, especially in the area of innovative solutions for adaptation and resilience" and to promote "the concrete actions needed to accelerate the global transition to a low-carbon economy ".

The World Bank Group is stepping up its climate support for Africa by providing $22.5 billion for Africa for climate adaptation and mitigation for the five years from 2021-2025. This more than doubles the commitment to climate-related projects over the last five years.

The funding is part of the Bank Group’s 2025 Targets to Step Up Climate Action, launched in December 2018 during the UN’s COP24 in Poland. It will help African countries manage the risks of a changing climate while unlocking new investment opportunities. IFC and MIGA, the Group’s private sector arms, will also continue to ambitiously grow their climate activities in Africa.

“People across Africa are already experiencing the growing impacts of climate change. This region is particularly vulnerable to increasing floods, droughts and destructive storms,” said Interim President of the World Bank Group, Kristalina Georgieva. “We have to do more and do it faster, or millions of people could be plunged into poverty. That’s why the World Bank is providing more money to build resilience and help communities cope with the effects of climate change in Africa.”

President Macron launched this initiative in December 2017 to accelerate the implementation of the 2015 Paris Climate agreement, which has seen slow progress, especially in decarbonizing the world economy, helping vulnerable countries and financing the low-carbon transition, particularly in Asia and in Africa.

Landry Ninteretse, Regional Team Leader for 350Africa, said, “Accelerating the global transition towards low carbon emissions means phasing out all fossil fuels projects. Globally, coal plants are being shut down one after another and strong commitments are being made by leaders in the global “North”.

However, Africa remains the only continent where coal seems acceptable, and continues to grow, while it’s the most vulnerable continent to climate change. Ending all coal projects in the short term and committing to not financing any new coal infrastructures is the only meaningful promise we’re expecting from this Summit. Anything short of that would amount to just paying lip service to climate action.”

Clémence Dubois, campaigner at 350 France, said: “French President Macron is convening a summit to advance climate action in and for Africa, while French oil giant Total is still extracting fossil fuels from Western Africa and many large French companies are still involved in fossil fuels extraction and production across the continent. African communities will never be safe from the worst impacts of climate change, as long as fossil fuel operations are rapidly phased out. If Macron is serious about being a climate champion, he should have a chat with French companies still polluting Africa and exploiting its resources. This is the pledge we’d like to see.”

New fund initiative hailed as an innovative climate solution at One Planet Summit

The ‘Land Degradation Neutrality Fund’ initiative promoted by the United Nations Convention to Combat Desertification (UNCCD) and Mirova (Natixis) to support sustainable land use practices globally is highlighted as a concrete and innovative climate action during the One Planet Summit.

Initial investors, including the European Investment Bank and the Agence Française de Développement, have announced financial commitments totalling more than USD 100 million out of a target of USD 300 million.

At the One Planet Summit, organized to celebrate the second anniversary of the Paris Agreement, the ‘Land Degradation Neutrality Fund’ initiative is hailed by Jean-Yves Le Drian, French Minister for Europe and Foreign Affairs, as an innovative solution that aligns sustainable land management with the ambition of the Paris Agreement.

“The public sector must be bold and inventive to unleash a revolution in development and entrepreneurship that can tackle the manifold and complex challenges before us – climate change, loss of productive land, lack of jobs, forced migration, droughts, floods, the list seems endless. The moment we see the land differently our horizons open wide. Then, the options and possibilities are endless,” says Monique Barbut, Executive Secretary of the UNCCD.

Developed by the UNCCD and Mirova, an affiliate of Natixis Investment Managers who also provided initial seeding for the Fund, it is one of the responses to the call for public and private finance in support of global climate action.

Restoring degraded land is a huge, yet greatly underestimated and underutilized opportunity to reduce greenhouse gas emissions and to adapt to climate change. By putting sustainable land use at the heart of its climate action, the ‘Land Degradation Neutrality Fund’ initiative addresses the three summit objectives:

1. Act concretely and collectively: This joint effort to put finance at the service of climate action is the outcome of a unique coalition of actors. It will invest in sustainable land management practices all over the world that have already been shown to be effective, but need suitable financing and technical assistance.
2. Innovate: This will be the first investment vehicle to focus on a Sustainable Development Goal (SDG) target, and using an innovative public private partnership structure. Success could motivate the development of new investment vehicles for the goals.
3. Support one another: Climate change is a global issue, but the effects are distributed unevenly, with especially negative impacts on land users. Acting on a global scale, this investment vehicle will therefore provide flexible financing solutions where traditional bank funding is not available.

As early supporter of the fund, all the way through the design and structuring phases, the European Investment Bank was joined by the Agence Française de Développement to become the anchor investors.

Other institutional investors include Fondaction, the first north-American private investor, foundation Fondation de France, insurance companies BNP Paribas Cardif and Garance.

The initiative is also backed by de-risking partners including the Government of Luxembourg, IDB Invest and the Global Environment Facility. In total, investors have announced commitments of over USD 100 million out of a target of USD 300 million.