The African Development Bank (AfDB) is set to double its climate finance commitments for the period 2020-2025, with around US$25bn investment, according to Akinwumi Adesina, president of AfDB
He said this during the One Planet Summit in Nairobi.
Adesina further announced that AfDB is on course to achieve its target of allocating 40 per cent of its funding to climate finance by 2020, progressing steadily from nine per cent in 2016 to 28 per cent in 2017 and 32 per cent in 2018.
Considering Africa’s high vulnerability despite contributing the least to climate change, the AfDB has successfully raised its adaptation finance from less than 30 per cent of total climate finance to parity with mitigation in 2018.
“The required level of financing is only feasible with the direct involvement of the entire financial sector,” said Adesina. “Consequently, the Bank launched the African Financial Alliance for Climate Change (AFAC) to link all stock exchanges, pension and sovereign wealth funds, central Banks and other financial institutions of Africa to mobilise and incentivise the shift of their portfolios towards low carbon and climate resilient investments.”
According to Adesina, “We have to be proactive in exploring alternatives. We will, therefore, be launching the ‘green baseload’ facility under the Sustainable Energy Fund for Africa (SEFA 2.0) to provide concessional finance and technical assistance to support the penetration and scale-up of renewable energy, to provide affordable and reliable renewable energy baseload.”
Several donors including Canada, Denmark, Germany, Norway, Italy, the UK and USAID have indicated their interest in this transformative instrument, which will help to replace coal.
AfDB has played a critical role in building Africa’s clean energy capacities. The Bank’s last investment in a coal project was 10 years ago. Additionally, and in line with its ambitious New Deal on Energy for Africa, 95 per cent of all Bank investments in power generation over 2016-18 have been in the renewables.