Africa Requires $250 Billion Green Tech Funding for Climate Change Mitigation through Green Banks
A recent report from the Climate Policy Initiative has disclosed that African leaders have established Green Banks to champion climate finance on the continent.
This revelation, made on the Climate Policy Initiative’s website, followed a recent gathering in Nairobi, Kenya.
The report underscores that Africa necessitates approximately $250 billion annually to facilitate the transition towards greener technologies and to adapt to the repercussions of climate change.
Regrettably, in 2020, funding fell significantly short, amounting to a mere $29.5 billion.
Despite continuous assurances from the developed world to furnish Africa with the necessary resources to combat climate change, the continent only contributes around 4 per cent of global carbon emissions.
This substantial financial gap has prompted African leaders to endorse the Nairobi Declaration. This declaration advocates for the implementation of a global carbon tax on major polluters as a means to generate climate finance.
During the Africa Climate Week held in Nairobi, the dearth of climate finance in Africa was a prominent concern.
In a unified voice, African leaders emphasized the pressing need for $250 billion annually to facilitate the transition towards greener technologies and to adapt to climate change.
The Nairobi Declaration, endorsed on September 6th, stands as a tangible testament that Africa, often relegated to the sidelines in global climate initiatives, is poised to take a leading role in combating climate change.
The declaration heralds Africa’s transformation into a cost-competitive green energy hub.
Audrey-Cynthia Yamadjako, the Coordinator of the African Green Bank Initiative at the African Development Bank, underscored the continent’s vast, untapped renewable energy potential.
She affirmed that Africa possesses the capacity to meet the global electricity demand from renewable sources by 2040, a staggering 50 times over.
Nevertheless, unlocking this potential hinges on securing climate finance, a commitment that is yet to materialize despite repeated assurances from the international community.
The African Development Bank’s side panel, titled ‘Kenya Green Investment Bank: Instrumental for the Kenyan Climate Resilient and Energy Transition Pathway’, outlined how the introduction of Green Banks across Africa could present a viable solution to the climate finance deficit.
The event, moderated by Gareth Phillips, featured a keynote address from Kevin Kariuki, Vice President for Power, Energy, Climate and Green Growth, alongside panellists Maryse Lokossou, Luis Tineo, and Gioconda Ortega Alarie.
The African Development Bank is poised to equip numerous institutions and governments with the necessary technical expertise and capital to establish Green Finance Facilities.
These facilities are designed to attract global climate investment, addressing not only the shortage of finance but also the readiness of banks and public sector entities in Africa to receive or attract investment.
The Green Bank Initiative, inaugurated at COP27, addresses this issue head-on, enabling financial institutions across Africa to access much-needed capital for transformative green projects.
In a landmark move, the Bank partnered with financial institutions, La Caisse des Dépôts et Consignations du Bénin (CDC Benin) and the Ivorian National Investment Bank (BNI), to establish the first Green Banks in Africa.
Kevin Kariuki, Vice President for Power, Energy, Climate and Green Growth, emphasized the transformative potential of the Green Bank model, presenting an opportunity for Africa to convert the $250 billion climate financing gap into a thriving investment avenue.
He highlighted that local banks, both public and private, possess the capacity to bridge the national climate and environmental finance gap without incurring sovereign debt.
Maryse Lokossou, Managing Director of CDC Benin, lauded the climate facility established through the Green Bank Initiative partnership.
She elucidated that the Green Finance Facility not only galvanizes resources for climate projects aligned with Benin’s strategy but also offers crucial aid and technical expertise for project development and management.
As African leaders converge once more to lobby the developed world for financial commitments at COP28 in Dubai, the Green Bank Initiative emerges as a pivotal instrument to assist African banks and sovereigns in attracting essential climate finance.
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