Africa needs 'business case' to attract climate change finance

Heads of various African groups speaking during the Africa Day at COP25
Business Day

Africa needs 'business case' to attract climate change finance

Despite accounting for less than four percent of global carbon emissions and being among the regions most vulnerable to climate change, Africa still accesses very little of the climate finance meant to adapt to changing climate risks.

The African Development Bank (AfDB) has attributed this to the continent’s inability to present itself as a business case with opportunities to attract climate finance.

“We are a continent that has what it takes to create the Africa we want. I believe what has been the missing link is the ability to brand right and act on the market signals,” Anthony Nyong, director of the climate change and green growth department at AfDB said during the Africa Day side event at the United Nations annual climate change negotiations (COP25) taking place this year in Madrid.

“We continue to present Africa as a vulnerable case and not a business case with opportunities. Where we have attempted the latter, the results have been spot on,” said Nyong, who is representing Akinwumi Adeshina, president of the bank.

According to him, the continent was able to attract 52 deals worth $40 billion in investments within three days during the 2019 Africa Investment Form because it presented itself as a business case.

He added that Africa can only deliver climate action urgently and at scale when it adopts the business model.

“The entire ecosystem model at national and sub-national levels has to be mobilized to remove the snags that block capital flow,” Nyong said.

At the Madrid conference, African leaders are demanding a fair share of global climate change finance to support adaptation and full implementation of Article 6.2 of the Paris Agreement.

Africa currently accesses three percent of climate monies made available through international bodies. Environment ministers of various African countries complain that they are yet to receive the climate finance promised by rich countries and whatever has been made available through international bodies was very difficult to access. 

“Africa is the continent that is most vulnerable to climate change impact and the least contributor to emissions,” Barbara Creecy, South Africa's environment minister and chairperson of the Africa Ministerial Conference on the Environment (AMCEN) said at the side event. “Yet we do not get enough finance for climate adaptation. We believe that ambition for action must be matched with ambition for response,” she added. 

A UN study says Sub-Saharan Africa would need an estimated climate adaptation finance of around $50 billion annually by 2050.

Ferzina Banaji, a spokesperson for the World Bank, says that the global bank group has announced a five-year financing plan of $200 billion to support countries to take ambitious climate action.

She said 70 percent of the fund, which will commence in 2020, will go for climate adaptation and mitigation projects in developing countries.

Other key issues apart from climate finance that are key for Africa negotiators at the ongoing COP25 are damage to soils and the full implementation of the Paris Agreement by developed countries.

Yasmine Fouad, Egypt's Minister of Environmental Affairs representing the African Union chair at the event, called on developed countries to fulfill their obligations to the pre-2020 period and provide the $100 billion annually to finance the battle against climate change, a 2009 promise made by then-US Secretary of State Hillary Clinton.

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