The Climate Change and Green Growth Department of the African Development Bank, in partnership with climate change consultancy Natural Eco Capital, recently organized two virtual workshops to equip financial institutions and Small and Medium Enterprises to benefit from climate investment.

Companies from six African countries - Angola, Egypt, Morocco, Mozambique, Nigeria and South Africa - attended the workshops. The sessions were delivered under the Bank's Private Sector Investment Initiative for Nationally Determined Contributions in Africa, financed by the Fund for Africa Private Sector (FAPA).

The first workshop, held from 6 to 7 October 2020, focused on practical training for SMEs and financial institutions and how to use two powerful climate change tools developed by the Bank.

Building on the work of the African Financial Alliance on Climate Change (AFAC), the second segment on 8 October targeted financial institutions, their role in climate action, and methods they can use to incorporate climate change into their financial products.

Al Hamdou Dorsouma, Manager of Climate and Green Growth at the Bank, told participants: "Learning how to use the GHG accounting tool and the climate risk screening and opportunity tool will enhance your capacity as SMEs to implement climate action and attract global climate finance, including finance from the Bank through your local finance institutions."

By the end of the workshop, participants had screened two real businesses for climate risks, estimated their carbon footprint and identified climate investment opportunities for them.

The Paris Agreement on Climate Change mandates all countries to submit Nationally Determined Contributions (NDCs) as their commitment to keeping global warming below two degrees Celsius. Almost all African countries have obliged by tabling their NDCs, which will cost about $3 trillion by 2030 to implement.

At least 75% of the investment needed to roll out the climate change requirements is expected to come from the private sector across several key industries. However, private sector participation in climate change initiatives in Africa remains low and must be strengthened to benefit from the abundant opportunities for green investments on the continent.

To attract climate finance into private investments, the Bank has developed four tools to support SMEs and financial institutions: a climate risk screening and opportunity toolkit for SMEs; a greenhouse gas (GHG) accounting tool for SMEs; climate change mainstreaming guidelines for lines of credit (LOCs); and a green jobs tracking tool. All four tools were launched this year.