The African Development Bank, alongside key partners, held a high-level dialogue on innovative climate finance solutions for Africa on the sidelines of COP29, the United Nations global climate conference currently underway in Baku, Azerbaijan.
Hosted at the Multilateral Development Banks' Joint Pavilion, the event brought together prominent decision-makers from governments, fund coordinators, private sector leaders, philanthropies, and civil society organizations. Discussions emphasized the urgent need for increased climate finance contributions and stronger partnerships.
Speaking on behalf of African Development Bank Vice President Kevin Kariuki, the Bank's Manager for Climate and Environment Finance, Mr. Gareth Phillips, outlined Africa's significant financing gap. "The African Economic Outlook projects a financing requirement of approximately $2.7 trillion by 2030 - equivalent to $400 billion annually -- to effectively combat climate change," Phillips stated. "Yet Africa received just $47 billion in 2022, accounting for only 3.6% of global climate finance. While the Bank's record $5.8 billion investment in climate adaptation and mitigation last year marks progress, it remains insufficient. We must dramatically accelerate our efforts to mobilize climate finance."
The African Development Bank showcased several ambitious initiatives to bridge this gap, including establishing Green Banks, expanding support through the Climate Action Window, creating new revenue streams for adaptation actions through the Adaptation Benefits Mechanism, the African Adaptation Acceleration Programme, and increasing focus on carbon markets, nature-based solutions and biodiversity conservation.
Madame Tariye Gbadegesin, CEO of the Climate Investment Funds (CIF), underscored the organization's catalytic role in scaling solutions. "CIF helps Multilateral Development Banks innovate and address complex, high-risk areas. With over $12 billion in funding supporting nearly 400 projects in more than 80 low- and middle-income countries, our work spans renewable energy, nature-based solutions, and the coal transition. With its unique vulnerabilities and immense potential, Africa stands at the forefront of the climate change challenge."
Ms. Dalila Goncalves, Regional Director for Africa, UN Office for Project Services (UNOPS), emphasized the pivotal role of non-financial institutions, like UNOPS, in facilitating effective utilization of climate finance, especially in fragile and high-risk environments.
The dialogue also featured insights from Mr. Vomic Nur Shah, Global Head of Origination of the UK Export Finance, who stressed the importance of collective action and explained how sustainable economic growth in Africa can be accelerated by complementing the private market investments with insurances, loan guarantees and various other financial instruments and incentives.
As part of the event, two key publications were presented to participants; "Climate Finance Matters 2024" on various funding options for climate action within the Bank and the guide "Understanding Power Project Financing," which was developed in collaboration with USAID. These resources will guide stakeholders in navigating climate finance opportunities and scaling impactful projects.
The dialogue concluded with a strong call for action, urging stakeholders to accelerate collaborative efforts and investments to close Africa's significant climate finance gap.
