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Innovative financing key to meeting climate adaptation targets for African countries
Despite having well defined national climate goals, African countries continue to struggle to raise the financing needed to meet their targets, particularly for climate adaptation.
This will be the key message for climate experts and representatives from around the world, attending the Africa Climate Week 2019 currently underway in Accra, Ghana under the theme “Climate Action in Africa: A Race We Can Win”.
Hosted by the Government of Ghana, the week-long event comes in the wake of the COP24 international climate negotiations, which concluded with the successful finalization of the “Katowice Climate Package” in December 2018.
The conference, which began Monday and concludes on Friday, 22 March 2019, will showcase the international community’s focus on the world’s climate action challenges. Participants at the Accra summit will also discuss seeming private sector apathy towards climate adaption projects and the paucity of convincing business cases that demonstrate commercial viability and good returns-on-investments in the renewable and green energy industries.
Beyond the challenges of financing climate adaptation projects in Africa, the industry also faces policy and capacity constraints. These constraints include limited legal frameworks and enforcement, the need for stronger and more inclusive climate change governance mechanisms, and the need to translate climate objectives into national and sectoral strategies and investment plans.
While these barriers are being addressed, progress is also being made across the African continent, where many Nationally Determined Contributions (NDC) Partnership member countries, including Mali, Morocco, Uganda, and Congo-Brazzaville have begun compiling adaptation initiatives into bigger investment packages, as part of their NDC Partnership Plans. This helps ensure that the critical but less lucrative projects get funded alongside mitigation projects and those with a more attractive return on investment.
In Kenya, for example, the African Development Bank provided partial risk guarantee financing to mitigate the transmission delay for the Turkana Wind project, the largest in Africa. Access to energy is a primary enabler in strengthening communities’ adaptive capacity.
In Mali and Morocco, water access and renewable energy projects are also being developed and promoted to multilateral and national development banks, sold as green bonds and pitched to private sector investors. And, in Congo-Brazzaville, a flood and stormwater management master plan, accounting for climate change projections over various time horizons, will be developed through the Adapt’Action Facility financed by the French Development Agency (AFD).
Governments are also demonstrating strong commitments to uphold the principles of the Paris Agreement by making domestic resources accessible. They are also reducing investor risks through climate legal frameworks, ensuring that climate action is a crucial part of a country’s national policies backed by enforced regulations. Countries are also finding creative ways of closing market inefficiencies through environmental levies on infringing pollution or deforestation activities, reinvesting this revenue back into more climate smart projects.
In a bid to ensure that country NDC plans are result-oriented and contain adequate and appropriate investor information, the Bank in collaboration with the NDC Partnership and the AFD (through the Adapt’Action facility) will be convening a session titled “Financing Adaptation through NDCs” on the sidelines of the Africa Climate Week 2019 event on Friday, 22 March 2019.
The side event will be a deep dive into key issues, obstacles and challenges confronting African countries, including an exploration of the mechanisms required to attract financing for climate adaptation.
A broad spectrum of stakeholders – country representatives, international development organizations, development partners, international institutions, national banks, and the private sector - are also expected to share their experiences on tackling and mitigating the effects of climate change.
Climate experts from the African Development Bank attending the Africa Climate Week 2019 will be adding their voices to the call for finding new and innovative ways to financing climate adaptation.
If you are attending Africa Climate Week, we invite you to join us for this important discussion.
* Uwella is a Senior Environment and Climate Change Officer at the African Development Bank and Gonnet works for the French Development Agency