• Saturday, March 02, 2024
businessday logo

BusinessDay

Global warming: AfDB to help private investors increase contribution to climate finance  

AfDB report puts Africa’s GDP at 3.8% in 2024

The African Development Bank said on Tuesday that it is committed to helping de-risk and remove business barriers that would help increase private investors’ contributions to climate finance on the African continent.

The development bank said that this move is in response to the increased danger of global warming on the continent, which contributes less than 3 percent but is the most vulnerable to climate risks.

In a statement made available on its website, the bank said, “To build resilience against climate change, the countries have outlined tangible ambitions for green growth, including plans to increase climate investment.”

Read also: AfDB bans S.A.R.L for 13 Months for fraudulent practices

It noticed that unlike other continents where there was increased climate investment, the continent still lags behind because of so many factors, and it agreed that it was going to work assiduously to change that picture.

It stated that one of its flagship programmes that was helping to deal with this challenge was its 2018 Africa Disaster Risks Financing Programme, designed to promote the deployment of disaster response mechanisms.

It said, “Amid dwindling climate finance flows to Africa, the African Development Bank has committed to helping to de-risk and remove business barriers to increase private investors’ contribution to climate finance on the continent.

“Over the past decade, the Bank has developed expertise and knowledge of financing climate-related projects. For example, the Bank launched its Africa Disaster Risks Financing Programme in 2018 in collaboration with the African Risk Capacity Group (ARC) to promote the deployment of disaster response mechanisms. Its total climate commitments increased to 45 percent in 2022, up from only 9 percent in 2016. By this, the Bank has exceeded its target of having 40 percent of its funding reserved for climate-related projects.”

As a way to broaden knowledge sharing and encourage private sector participation, the AfDB said its Annual Meetings from May 22 to 26 in Sharm el-Sheikh, Egypt, will focus on tackling climate change on the continent.

The bank said, “During its upcoming Annual Meetings from 22 to 26 May in Sharm el-Sheikh, the Bank will host a session to explore how to mobilise more private sector financing to tackle climate change in Africa, including domestic natural capital. This flagship event will bring together entrepreneurs, pension and private equity fund managers, financiers, and government representatives to discuss different instruments and how to deploy them on a large scale on the continent.

“The delegates will consider green financing tools such as green bonds, sustainable bonds, social bonds, sustainability loans, and debt-nature or debt-climate swaps. Participants will discuss national and international levers to overcome obstacles to implementing such instruments.

“With lessons from best practises in Africa and internationally, the African Development Bank hopes to foster the development of innovative financial instruments to support investment in climate and green growth while ensuring a fairer distribution of resources across Africa.”