The African Development Bank (AfDB) has doubled its commitments pledging USD25 billion to climate finance in Africa.
This commitment comes just a day after the World Bank pledged a USD22.5 billion funding to support the continent’s climate adaptation and mitigation.
AfDB is doubling its climate finance commitments to at least USD25 billion for the period 2020-2025. The funding was announced by the Bank’s President Akinwumi A. Adesina on Thursday at the One Planet Summit taking place in Nairobi.
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 per cent of its funding to climate finance by 2020, a year ahead.
Africa’s climate change vulnerability
The Bank’s commitment on the target, the highest among all multilateral development banks, has progressed steadily from 9 per cent in 2016 to 28 per cent in 2017 and 32 per cent in 2018.
Considering Africa’s high vulnerability despite contributing the least to climate change, AfDB has successfully raised its adaptation finance from less than 30 per cent of total climate finance to parity with mitigation in 2018.
The 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.
African Financial Alliance for Climate Change (AFAC)
“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.”
Replacing coal energy
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.
AfDB 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.
Desert to Power programme
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.