Enhancing Climate Resilience in Africa Through DFI Investments in Mitigation and Adaptation Strategies
According to the World Economic Forum’s 2024 Global Risks Report, extreme weather events are ranked as the second and first most severe global risks in the short term and long term, respectively. The African Development Bank (AfDB) identifies climate change as the foremost threat to development in Africa, disproportionately affecting the continent’s poorest countries and exacerbating existing vulnerabilities. Africa stands as the most climate vulnerable region globally, with minimal resilience and preparedness against climate change.
This persistent challenge has galvanised global efforts towards climate change mitigation and adaptation, receiving support from governments and multilateral institutions worldwide. Commitments under the United Nations Sustainable Development Goals (SDGs) and the Paris Climate Agreement underscore the global dedication to combating climate change through emission reduction (mitigation) and enhancing resilience against extreme climate events (adaptation).
Financing is critical for implementing climate mitigation and adaptation programmes, especially in regions like Africa, which are significantly impacted by climate change. Despite stiff competition for funds, the AfDB highlights the global benefits of supporting climate action in Africa. However, it also points out that subSaharan Africa receives less than 3 per cent of global climate finance.
Amid these challenges, Development Finance Institutions (DFIs) on the continent are leading in driving resilience against climate change’s devastating impacts and supporting the transition to a low-carbon economy. DFIs contributed to 69 per cent of adaptation finance in Africa during 2019-2020, according to the Global Climate Centre on Adaptation. The contributions of key DFIs, such as the AfDB and the International Finance Corporation (IFC), in mobilising funds for climate projects in Africa are commendable.
The African Development Bank (AfDB) has established the Climate Action Window (CAW) to expedite and streamline access to climate finance. It aims to mobilise co-financing while prioritising assistance for the most vulnerable nations, including fragile states and those impacted by conflict. The CAW is committed to dedicating 75 per cent of its resources towards bolstering adaptation measures, 15 per cent to mitigation efforts, and the remaining 10 per cent to providing technical assistance. With an ambitious goal to secure $4 billion by 2025, the CAW sets its sights on an ultimate target of $13 billion funding portfolio. According to the AfDB, the flagship continental climate finance vehicle will support projects across six sectors including agriculture and food security;