The African Financial Alliance on Climate Change (AFAC) unveiled a new vision for 2030 during the global climate summit (COP27), prioritizing mobilizing capital and tools to meet the Paris Agreement goal.
AFAC, a pan-African alliance of Africa's key financial institutions and commercial and development banks, mobilizes private capital to support continent-wide low-carbon and climate-resilient development.
The new blueprint mainly focused on aligning financial flows with achieving greenhouse gas emissions and climate-resilient development by 2030. It proposed improvement in areas such as leadership awareness, access to data, climate risk regulation, climate risk management, and green finance.
The launch drew together representatives of the African Development Bank, the Global Centre on Adaptation, financial institutions, and country representatives. AFAC called for feedback from the stakeholders on a new strategy.
"The suggested changes should be made fast and returned for approval. We need speed to act. We do not have time," said IFRS Sustainability Board member Dr. Ndidi Nnoli-Edozien. IFRS is a not-for-profit, public interest organization working to develop high-quality, enforceable, and globally accepted accounting and sustainability disclosure standards
The strategy also identified three critical challenges that need to be overcome: a lack of available data to assess financial risk, inadequate internal capacity at national central banks to create a level playing field for the private and public sectors, and the need to regularize and harmonize with international standards and practices.
Kevin Kariuki, African Development Bank Vice President of Power, Energy, Climate and Green Growth, noted that climate finance has been largely public sector-oriented. "There are enough calls to mobilize these finances through the private sector. AFAC is a channel that can mobilize climate finance from the private sector once these changes are finalized," he added.
COP27, widely referred to as the African COP, ran from 6-18 November 2022 in Sharm El Sheikh, Egypt.
About African Financial Alliance on Climate Change
The African Financial Alliance on Climate Change aims to put the financial sector at the center of climate action in Africa. It brings together Africa's key financial institutions, including central banks, insurance companies, sovereign wealth and pension funds, stock exchanges, as well as commercial and development banks, to mobilize private capital flows towards continent-wide low-carbon and climate-resilient development.
AFAC will promote climate action through knowledge sharing, climate risk-mitigating financial instruments, climate risk disclosure, and climate finance flows.
