CLIMATE change is a severe challenge in Southern Africa, as evidenced by South Africa, Madagascar, Malawi, Zambia and Zimbabwe losing hundreds of people due to a succession of cyclones earlier this year.
The Southern African Development Community (SADC) region is still reeling from the aftermath of Cyclones Idai and Kenneth that claimed more than 1,000 lives while property worth billions of dollars were destroyed including 500,000 homes.
A lack of investment into climate projects has been blamed for these tragedies.
There are fears more lives will be lost amid lack of investments.
A US$56 million investment is anticipated to address such disasters.
The Development Bank of Southern Africa (DBSA) and the Green Climate Fund (GCF) have signed the deal, which will kick-off a programme to accelerate investments into climate projects and break market barriers.
It seals the GCF's investment into the DBSA's Climate Finance Facility (CFF), a first-of-its-kind climate finance facility in Africa using a pioneering Green Bank model.
The programme will target South Africa, Namibia, Lesotho, and Eswatini.
However, officials indicated a strong potential for the project to be replicated in other developing countries to rapidly scale up private sector climate investments.
Patrick Dlamini, Chief Executive of the DBSA, said climate change was a severe and growing threat that affected Africa's economies, natural resources, livelihoods and social stability.
"The signing of this agreement today is a significant milestone that represents our concerted effort to address climate change and contribute to the broader low-carbon and resilient development trajectory in Southern Africa," Dlamini said.
The Southern Africa region is exceptionally susceptible to adverse effects of climate change, such as extreme droughts and rainfall fluctuations.
According to experts, moving national economies away from fossil fuels, which still dominate the energy mix in the region, would come at a high price.
In South Africa alone, more than $349 billion will be needed to reach national 2050 goals established in the country's Nationally Determined Contributions.
Yet, the banking sector in South Africa has total assets exceeding $380 billion.
Yannick Glemarec, GCF Executive Director, said the DBSA Climate Finance Facility was thus a great example of GCF support for financial innovation which helps promote transformative climate action in the private sector.
The executive said CFF had potential to accelerate Green Banking and shift significant private capital into climate investments.
"I'm very excited to see the GCF and DBSA partnership turning these innovative financial models into reality," Glemarec added.