Dr Akinwumi Adesina, President of the African Development Bank (AfDB), has announced that the Bank would nearly triple its annual climate financing to reach $ 5 billion annually by 2020.
AfDB’s climate spending would increase to 40 per cent of its total new investments by the targeted date.
“Climate change is both an urgent threat and a unique opportunity,” Dr Adesina said in the Climate Finance Ministerial Meeting co-hosted by Peru and France in Lima as part of the World Bank and the International Monetary Fund (IMF) annual conference.
AfDB, established in 1964 and headquartered in Abidjan, Côte d’Ivoire, is owned by the 54 African countries and 26 non-African countries, aimed to spur sustainable economic development and social progress in its regional member countries, thus helping to reduce poverty through mobilising and allocating resources for investment, as well as provide policy advice and technical assistance.
He said: “The Bank is significantly stepping up its support for African countries, not only to meet that threat but also to seize the opportunity to drive low-carbon, climate-resilient growth.”
Half of the $ 5 billion would be dedicated to reducing Africa’s greenhouse gas emissions by unlocking Africa’s enormous potential for renewable energy, especially solar, hydro, wind and geothermal power.
The remaining half would assist African economies adapt to climate change through measures such as investing in climate-resilient crops, building sustainable infrastructure and improving irrigation and access to water.
To this end, the Bank would also be integrating climate resilience into all of the infrastructure projects it finances.
The Bank has committed almost $ 7 billion to support climate-resilient and low-carbon development in Africa in the past four years.
Its energy investments last year would deliver power that is 90 percent generated from renewable sources. The AfDB also supports the Africa Renewable Energy Initiative and the Africa Adaptation Initiative, both endorsed by the African Union heads of state and government.
Dr Adesina said AfDB would pursue public and private co-financing opportunities. “The Bank will be seeking, for instance, to mobilise concessional financing from the Green Climate Fund. It will also issue more green bonds as a way of funding its climate investments”.
“The current climate financing architecture is not providing the finance Africa needs. Africa is shortchanged by climate change, and Africa is shortchanged by the lack of sufficient climate financing. This must change."
Dr Adesina added that climate change hurts Africans in a number of sectors.
He pointed out that rising temperatures are putting smallholder farmers in the Sahel at risk from frequent droughts that damage crops and livestock including fishermen when sea levels rise.
"Keeping the rise in temperatures below 2 degrees Celsius is non-negotiable."
"The reality is that while Africa contributes less than two per cent of the total greenhouse gas emissions, its populations suffer disproportionately from negative impacts of climate change," the AfDB President said.
The Bank’s announcement reflects the high priority it places on addressing climate change in its 10-year Strategy 2013-2022, as well as massive new support for the energy sector for which the “New Deal on Energy for Africa” was unveiled.
The landmark initiative aims to solve Africa’s huge energy deficit by 2025, and to spur economic growth that would enhance Africa’s capacity to adapt to climate change.
Developed countries have committed to mobilising $100 billion a year from 2020 in climate finance for developing countries. In Paris in December, the international community is expected to finalise a new global climate agreement and decide how to finance it, at the Conference of the Parties to the United Nations Framework Convention on Climate Change.
“To meet the $100 billion per annum target by 2020, we must improve the predictability and mobilisation of finance. I support the efforts by Multilateral Development Banks to enhance our share of climate finance, now and in the future.”
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