The President of African Development Bank (AfDB), Dr. Akinwumi Adesina has agreed with the President of European Bank for Reconstruction and Development (EBRD), Mrs. Odile Reinaud-Basso to set up a cooperation to enhance resilience among African businesses.
The two development bank heads had a discussion during this year’s global climate summit (COP27) in Sharm El Sheikh, Egypt.
Dr. Adesina indicated that, “climate adaptation in Africa was a key condition to preserving economic growth and maintaining social cohesion on the continent.”
Mrs. Reinaud-Basso assured AfDB of EBRD’s commitment to support the implementation of the Africa Adaptation Acceleration Program (AAAP), since that was an initiative jointly launched in 2021 by the African Development Bank and the Global Centre on Adaptation.
“The program is mobilizing $25 billion by 2025. These funds will help accelerate climate adaptation action in Africa through initiatives in four priority areas; food security, resilient infrastructure, youth entrepreneurship and job creation, as well as innovative climate adaptation finance.”
Mrs. Odile Reinaud-Basso
According to her, Africa has the potential to become a global leader in climate adaptation solutions and services and hence, EBRD would give its full support to expand the cooperation to support Africa in fulfilling its potential.
Dr. Akinwumi Adesina also assured to work in hand with EBRD counterpart to fully align on the need for multilateral development banks to adjust their business models for response to the multiple crises being faced, including climate change, and the task of building resilient economies.
“While preserving their triple-A rating, which must remain the cornerstone of multilateral development banks’ business model, MDBs must find avenues to secure more risk capital to leverage more private sector investments.
“One of these in the short term is the reallocation of a portion of their International Monetary Fund Special Drawing Rights from wealthy countries to MDBs. These can apply a multiplier factor of 3 to 4 on it. Both the African Development Bank and the EBRD are ready to implement this option, which will offer significant value for money to the countries that will provide SDRs.”
Dr. Akinwumi Adesina
AfDB and EBRD Calls On Other Institutions
According to Dr. Akinwumi Adesina and Mrs. Odile Reinaud-Basso, Global heating entails rethinking of how infrastructure, cities, and financial systems are designed and operated, hence they would appreciate an effective partnership between public and private actors as well as strong engagement with civil society to curb issues relating to Climate Change and enhancing resilience among African businesses.
“By partnering and working closely with government institutions, public utilities, local enterprises and communities, multilateral development banks can play a catalytic role in developing the approaches to finance that underpin this transformation since financing models use both public and private channels,” they disclosed
According to them, Multilateral development banks can also support the development of innovative financing products using blended finance approaches and developing market-based instruments that reward enterprises investing in climate resilience projects.
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