Clos­ing the Gap in Cli­mate Fi­nance in Sub Sa­ha­ran Africa

Financial Nigeria Magazine - - Sustainable Development With Access Bank Plc - By Chizu­rum Chik­wendu A blog­ger, Chizu­rum Chik­wendu is an en­vi­ron­ment and en­ergy en­thu­si­ast. He is on Twit­ter @tint­edea­gle.

Africa faces some of the most se­vere im­pacts of cli­mate change although the con­ti­nent ac­counts for an in­fin­i­tes­i­mal pro­por­tion of the in­dus­trial ac­tiv­i­ties that sci­en­tists say con­trib­ute to global warm­ing and ex­treme cli­matic events. The mis­match of cause and ef­fect of cli­mate change in Africa ex­plains why the de­vel­oped in­dus­trial coun­tries of­ten agree to con­trib­ute to fi­nanc­ing for cli­mate change mit­i­ga­tion and adap­ta­tion pro­grammes on the con­ti­nent. On its own, and based on cur­rent re­al­i­ties, Africa can­not pro­vide all the needed re­sources.

But, un­for­tu­nately, only a tiny frac­tion of global cli­mate fi­nance has reached Sub Sa­ha­ran Africa – the world's least de­vel­oped re­gion. Even worse, the poor­est na­tions in the re­gion have been the least re­cip­i­ents of the cli­mate in­ter­ven­tion fund­ing. Th­ese trends need to change.

A num­ber of fi­nanciers and aid agen­cies have re­mained com­mit­ted to the goal of cli­mate change mit­i­ga­tion and adap­ta­tion. They have pledged funds to sup­port coun­tries' re­silience sys­tems as well as low-car­bon de­vel­op­ment. The Clean Tech­nol­ogy Fund (CTF), ad­min­is­tered by the World Bank, and the Least De­vel­oped Coun­tries Fund (LDCF), op­er­ated by the Global En­vi­ron­ment Fa­cil­ity (GEF), are the largest fun­ders of cli­mate change projects in Africa. A to­tal of $2.67 bil­lion has been ap­proved for more than 400 projects and pro­grammes on the con­ti­nent since 2003, ac­cord­ing to

Cli­mate Funds Up­date (CFU), an in­de­pen­dent web­site that pro­vides in­for­ma­tion on the grow­ing num­ber of in­ter­na­tional cli­mate fi­nance ini­tia­tives de­signed to help de­vel­op­ing coun­tries ad­dress the chal­lenges of cli­mate change.

More­over, the six big­gest mul­ti­lat­eral de­vel­op­ment banks (MDBs), namely the Euro­pean In­vest­ment Bank (EIB), the In­ter-Amer­i­can De­vel­op­ment Bank Group (IDBG), the African De­vel­op­ment Bank (AfDB), the Euro­pean Bank for Re­con­struc­tion and De­vel­op­ment (EBRD), the World Bank Group (WBG), and the Asian De­vel­op­ment Bank (ADB) jointly mo­bi­lized the sum of $81 bil­lion in 2015 for cli­mate fi­nance. But out of this amount, Sub Sa­ha­ran African coun­tries re­ceived only 9%, or $7.29 bil­lion.

Cen­tral Asia and the non-Euro­pean Union coun­tries of Europe re­ceived the lion share of the fund­ing at 20%, fol­lowed by South Asia, which re­ceived 19%. Caribbean and Latin Amer­ica got 15%, the Pa­cific and East Asia 14%, the EU 13%, and North Africa and the Mid­dle East 9%. Multi-re­gional deals made up the re­main­ing 2% of the to­tal fund­ing.

The ma­jor ob­sta­cle to cli­mate in­vest­ment in the SSA re­gion has been the trans­ac­tion costs of the mi­cro-scale projects that are needed in the least­de­vel­oped ar­eas, as well as the prob­lem of de­sign­ing and car­ry­ing out such projects in ef­fec­tive ways – fi­nan­cial vi­a­bil­ity and repli­ca­ble abil­ity. Also, the need to dis­trib­ute cli­mate fi­nance evenly and uni­formly has be­come a great ob­sta­cle in the re­gion.

Twenty cli­mate funds are func­tion­ing in the re­gion. The big­gest con­tri­bu­tion is from CTF, which has ap­proved $446 mil­lion for four large-scale re­new­able en­ergy projects in South Africa. The In­ter­na­tional Cli­mate Ini­tia­tive (ICI) of Ger­many, the In­ter­na­tional Cli­mate and Forests Ini­tia­tive (ICFI) of Nor­way, and the In­ter­na­tional Cli­mate Fund (ICF) of the UK have all in­vested in SSA coun­tries via their in­di­vid­ual coun­try's bi­lat­eral cli­mate funds. Fund­ing for South Africa has been largely chan­neled to Eskom Re­new­able En­ergy project.

The AfDB pro­vided $905 mil­lion from her in­ter­nal re­sources in 2015, sup­ple­mented by $58 mil­lion in ex­ter­nal re­sources to boost the re­gion's re­new­able en­ergy as­sets.

The Bank has set am­bi­tious goals for stake­hold­ers in the in­dus­try to help en­sure that Africa ex­pe­ri­ences an ex­po­nen­tial growth in clean en­ergy ac­cess as well as ben­e­fit from an ex­ten­sive in­crease in cli­mate-friendly en­ergy use and green de­vel­op­ment. This will as­sist the re­gion in sup­port­ing in­no­va­tive projects in so­lar, wind, geo­ther­mal, and water, as noted by Alex Rugamba, Chair of AfDB's Cli­mate Change Co­or­di­na­tion Com­mit­tee (CCCC).

Fur­ther­more, the AfDB pro­vided $305 mil­lion of her own re­sources and $91 mil­lion of ex­ter­nal re­sources in 2015 to sup­port adap­ta­tion com­mit­ments to in­ten­sify the re­silience of Sub Sa­ha­ran Africa against cli­mate change es­pe­cially in forestry, agri­cul­ture and land use sec­tors. Water and waste water sys­tems re­ceived 27% of the adap­ta­tion fund. En­ergy, trans­porta­tion and re­lated in­fra­struc­ture got 24%, and crop and food pro­duc­tion 18%. Re­new­able en­ergy re­ceived the bulk of mit­i­ga­tion fi­nance at 30%, lower car­bon trans­port at 26%, and en­ergy ef­fi­ciency com­mit­ments at 14%.

Look­ing into the fu­ture, the MDBs will in­crease cli­mate fi­nance ac­tiv­i­ties in many sec­tors, es­pe­cially in re­new­able en­ergy and en­ergy ef­fi­ciency; low car­bon and cli­mate re­silient cities, re­gions, and in­dus­tries; low car­bon trans­porta­tion; nat­u­ral re­source ef­fi­ciency; cli­mate-friendly agri­cul­ture; and food se­cu­rity. Th­ese will sup­port im­ple­men­ta­tion of the Paris Agree­ment.

As coun­tries of Sub Sa­ha­ran Africa work to put their de­vel­op­ment goals right and im­ple­ment their Na­tion­ally De­ter­mined Con­tri­bu­tions (NDCs) un­der the Paris Agree­ment, mo­bi­liza­tion of cli­mate fi­nance for the re­gion must gain more mo­men­tum. The ob­sta­cles to even dis­tri­bu­tion of re­sources ac­cord­ing to need must be ad­dressed to avoid in­creas­ing crys­tal­liza­tion of cli­mate risk in the poor­est coun­tries al­ready in the eye of the storm.

The ob­sta­cles to even dis­tri­bu­tion of re­sources ac­cord­ing to need must be ad­dressed to avoid in­creas­ing crys­tal­liza­tion of cli­mate risk in the poor­est coun­tries al­ready in the eye of the storm.

African De­vel­op­ment Bank head­quar­ters, Abid­jan, Cote d’Ivoire

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.