African countries will need about $3 trillion by 2030 to implement national climate actions in agreement with commitments they made under the Paris Agreement on Climate Change.

That said, however, the continent currently has access to only three per cent of the global finance on climate.

The African Development Bank (AfDB), which made this known at the 2019 Climate Chance Summit Africa in Accra last Friday, described the situation as “very unfortunate.”

“This is not good at all because African countries are experiencing serious impacts from climate change as was recently seen in Mozambique where cyclone Ida hit the country and in Zimbabwe and Malawi which though are not coastal countries lost more than 800 people combined and $2 billion of infrastructure destroyed,” the AfDB stated.

The bank blamed Africa’s inability to access global climate finance on what it described as limited capacity to develop bankable climate projects that met climate fund requirements, weak institutions that were not able to be accredited with funds such as the Green Climate Fund (GCF) and the inability to attain classification at the highest categories in order to have direct access to funds at scale.

“Institutions in Africa accredited so far to access these global funds are classified as low level fund category making them eligible to small-sized funding only,” the bank stated.

Paradigm shift

The Division Manager in-charge of Climate Change and Green Growth at the AfDB, Mr Al-Hamndou Dorsouma, who made the statement in Accra last Friday, said: “Unfortunately, climate disasters are expected to increase in the future so we need to start looking at the way we do business.”

“We need to move away from disaster relief to building resilience which requires not only finance but also technology in the form of early warning information to help people to prepare for disasters,” he said.

Mr Dorsouma was responding to a question at the closing ceremony of the Climate Chance Summit on the commitment of global climate finance institutions to support efforts in tackling climate change on the continent.

The three-day summit, which was held on the theme, “Stepping up local climate action in Africa”, was attended by mayors of African cities, representatives of the private and public sectors, civil society organisations and development partners who deliberated on ways to improve opportunities for local governments in Africa to gain access to global climate funds.

Private finance key

Mr Dorsouma said a study carried out by the bank in 2017 concluded that to help African countries achieve all the commitments they had made under the Paris Agreement, they needed $3 trillion by 2030.

The study, he said, also concluded that 75 per cent of the $3 trillion had to come from the private sector since public finance was not enough to fund climate-related projects on the continent.

“But to mobilise private finance, we need to meet some requirements and create the necessary environment to do that and that is an issue for us,” he stated.

To address such challenge, he said the bank had created the African Financial Alliance on Climate Change, a new initiative to mobilise the private sector within and outside Africa to help out.

AfDB’s investments

Mr Dorsouma pointed out that each year the AfDB spent $10 billion on development projects across the continent.

“As of last year, $3 billion of this $10 billion was allocated as climate finance for climate sensitive centres.

That is to tell you that even at our level as a development institution things are improving and it is unlike five or six years ago when most of our finances went to sectors that were not climate sensitive,” he said.

Green funds

The Regional Advisor, Local Development Finance Practice of the UN Capital Development Fund, Ms Christel Alvergne, said her outfit supported least-advanced countries and local governments to gain access to climate funds.

She said, however, that in order to attract such green funds African countries must develop sustainable projects that were relevant to the development needs of communities, especially in the areas of food safety, access to basic service, health, water and education.

The Director of Centre for 21st Century Issue in Nigeria, Ms Titilope Ngozi Akosa, said to address access to climate finance locally, the Nigerian government had issued three climate bonds—green climate bonds, corporate climate bonds and public funding climate bonds—to mobilise funds to tackle climate change issues in the country.

More funds

An Investment Officer in-charge of Proparco, West Africa, a subsidiary of the French development agency, Agence Francaise de Development (AFD), Mr Guy Orsot, said his outfit had since 2018 committed almost €4.8 billion for climate projects globally.

In addition, he said, under its global Sustainable Use of Natural Resources and Energy Finance, his outfit had also earmarked €2.5 billion to boost financing for sustainable natural resources management projects.

“In Ghana, we are starting with a pilot project worth 30 million euros and we are going to work with three banks that would allow small and medium enterprises SMEs to have access to finance for bankable climate projects,” he said.