Lagos — The African Development Bank (AfDB) has said that it was significantly achieving its target of allocating 40 per cent of its funding to climate finance by 2020, a year ahead of schedule.
This is according to the bank's president, Akinwumi Adesina, who highlighted this at the recent One Planet Summit, which took place in Kenya. Adesina said the bank plans to commit at least $25 billion towards climate finance.
The bank's commitment on the target, the highest among all multilateral development banks, has progressed steadily from nine per cent in 2016 to 28 per cent in 2017 and 32 per cent in 2018.
"The required level of financing is only feasible with the direct involvement of the entire financial sector," said Adesina.
He continued, "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 mobilise and incentivise the shift of their portfolios towards low carbon and climate resilient investments."
The AfDB made another milestone announcement. "It is not good enough to simply ask countries to stay away from polluting technologies.
"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," he said.
Several donors, including Canada, Denmark, Germany, Norway, Italy, the UK, and USAID have indicated their interest in this transformative instrument, which would also help to replace coal. The 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.
Additionally, and in line with its ambitious New Deal on Energy for Africa, 95 per cent of all bank investments in power generation over the 2016-18 period have been in renewables.