The African Development Bank (AfDB) has taken the lead to what may turn out to be Africa’s most decisive action to ensure that the continent is not short-changed by climate finance.
At the 53rd Annual Meetings of the Bank in Busan, Korea, the institution brought stakeholders together to discuss the establishment of the Africa Financial Alliance for Climate Change (AFAC).
“The establishment of the African Financial Alliance for Climate Change is a call for us to stand together to mobilize climate finance at scale to meet the needs in Africa”, President of ADB, Akinwumi Adesina, explained Friday, May 25.
The initiative was well received by key continental and global stakeholders who agreed with the Bank that Africa needs immediate climate change action.
The 2015 Paris Climate Agreement calls on countries to increase their ability to adapt to the adverse impacts of climate change without threatening food production, and make financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.
To the effect, the international community has pledged to mobilize $100 billion in climate finance per annum by 2020 to support adaptation and mitigation projects in developing countries. However, of the US $820 billion in climate finance flows for 2015 and 2016, only US $16 billion was for Africa.
This represents only a meager 2% of the total funds, a situation that makes it important for Africa to have its own cash flow.
“This is why the African Development Bank is hosting this open dialogue to initiate the establishment of the African Financial Alliance for Climate Change as a call for us to stand together to mobilize climate finance at scale to meet the needs in Africa,” Adesina added.
He however noted that ADB could not achieve the task sole-handedly, pointing out that without achieving the Paris Climate Agreement in Africa, the world will not achieve the required reductions in greenhouse gases to keep global temperatures below the required target.
The Alliance brings together Africa’s financial sector, including Ministers of Finance, Central Banks, insurance and reinsurance companies, sovereign wealth and pension funds, stock exchanges as well as global thought leaders to mobilize climate finance for Africa.
It also hopes to come up with concrete proposals to mobilize both domestic and international finance for climate-resilient development in Africa.
“Together, we can create a Decarbonisation Index for Africa,” President Adesina told the meeting.
The Africa Financial Alliance for Climate Change will be launched on the margins of the Africa Investment Forum in South Africa, November 7 to 9, 2018 and will bring together heads of financial institutions.