The African Development Bank Group’s initiatives towards building a climate-resilient Africa drew significant support at the 2023 UN Climate Change Conference (COP28), garnering donor commitments and global partnerships.
The Bank has launched several flagship initiatives to help African countries implement the Paris Agreement on Climate Change and achieve the Sustainable Development Goals. The programmes will also ensure that the continent’s growth builds prosperity along a decarbonized, climate-friendly, environmentally sustainable, and socially inclusive path.
In the first week of COP28, the Bank and its partners mobilized over $175 million for the Alliance for Green Infrastructure in Africa (AGIA) to help advance the programme toward its first close of $500 million of early-stage project preparation and development capital. The Alliance, launched at COP27, is a partnership of the African Union Commission, the African Development Bank, Africa50 and other global partners. It works to unlock up to $10 billion in private capital for green infrastructure projects and galvanise global action to accelerate Africa’s just and equitable transition to Net-Zero.
The week also saw firm pledges from developed nations to channel their Special Drawing Rights (SDRs) to developing countries through multilateral development banks. The African Development Bank and the Inter-American Development Bank have advanced an innovative proposal for SDR-rich nations to lend them through multilateral development banks.
During the conference, several countries, including France, Japan, Spain, and the United Kingdom, strongly supported the use of hybrid SDR instruments to provide development resources to needy countries in Africa, Latin America, and the Caribbean.
The Proposal to Purchase SDRs
The proposal to purchase SDRs provides a unique mechanism to leverage value multiple times to help deliver projects spanning education, health, green infrastructure and other vital sectors.
More than 110,000 delegates worldwide are attending this year’s conference in Dubai, United Arab Emirates, on the theme Unite, Act, Deliver. COP28 presents a critical moment for the world to take stock of the progress made since the Paris Agreement in 2015.
In its engagements at the conference, the Bank delegation, led by its President, Dr Akinwumi Adesina, amplified Africa’s voice in drawing the world’s attention to the urgent need for critical resources to implement the continent’s climate action agenda.
Africa needs around $2.8 trillion to respond adequately to climate change over the 2020-2030 period. The annual climate finance flows to Africa stand at only $30 billion, of which just 39% goes towards adaptation.
The Bank also launched the first call for climate adaptation proposals for its Climate Action Window. The launch signals the initiative’s implementation to deliver climate-resilient agricultural technologies and insurance for 20 million farmers, rehabilitate one million hectares of degraded lands, provide water, sanitation and health services to 18 million people, and provide renewable energy for nearly 10 million.
The Climate Action Window aims to raise at least $4 billion through 2025 and is well-positioned to leverage 50 years of the Bank’s experience in supporting Africa’s poorest and most fragile countries.
Promoting clean cooking was high on the agenda at COP28. The Bank took part in several initiatives to advance its health, climate and gender benefits and mobilize funding for women’s access to clean cooking equipment in Africa.
Close to one billion people in Africa do not have access to clean cooking and rely on biomass or kerosene, which causes high indoor air pollution. As a result, about 600,000 African women and children die annually from the hazards of cooking with woody biomass or fossil fuels, according to official data.
The Bank Would Allocate Up To 20 Percent of Its Approved Annual Lending For Energy
Adesina said the Bank would allocate up to 20 percent of its approved annual lending for energy toward clean cooking solutions. This will generate $2 billion over the next 10 years. He said national governments should also allocate at least 5 percent of the current $70 billion yearly energy investment to provide clean cooking solutions.
“Providing access to clean cooking is doable in Africa. Let us prioritise saving the lives of women and children; let us make it easier for women to cook in dignity and safety. Clean cooking will save forests, climate and lives of women and children.”
Dr Akinwumi Adesina
The International Energy Agency has warned that without solving the problem of dirty fuel cooking in Africa, the global plan of decarbonising would not be meaningful. According to the Agency, the continent requires $4 billion in annual investment to provide 250 million people with clean cooking energy. “We believe this issue should be solved because it is a stain on humanity,” IEA Executive Director Fatih Birol told delegates.
At COP28, the African Development Bank Group announced its adoption of climate-resilient debt clauses (CRDCs), joining major creditors and international development banks at a session organized by the UK, Barbados and the InterAmerican Development Bank under the auspices of the Bridgetown Initiative.
Debt Service Suspension Clauses allow countries to defer debt service payments following a pre-defined severe shock or natural disaster for a pre-agreed period. They provide relief when needed and fiscal space for countries to stabilize before debt and service payments.
Seventy-three countries worldwide, including many of the most climate vulnerable, now urge all creditors to urgently adopt CRDCs terms to provide financial security against accelerating climate impacts.
Dr Adesina announced the Bank Group will begin incorporating CRDCs into future sovereign lending in 2024, starting with the African Development Fund, its concessional arm. Nine of the ten countries in the world most vulnerable to climate change are in Africa, and all rely on the African Development Fund.
On the sidelines, the Bank joined the launch of Mozambique’s $80 billion energy transition strategy to leverage its vast renewable resources to deliver energy to its people.
Noting that Africa only accounts for 3% of the global, the International Energy Agency said holding the continent back from developing its hydrocarbon reserves would be unjust. “If you develop all the deposits, these emissions will rise from 3 to 3.4 per cent, which is nothing, ” IEA chief Birol said.
The Bank also unveiled 8 young women as winners of the 2023 YouthAdapt competition. Each business will receive grant funding of up to $100,000 and comprehensive mentorship and coaching as part of a 12-month accelerator program. Since its launch in 2021, the YouthADAPT initiative, a partnership of the Bank Group and the Global Center on Adaptation, has provided over $5 million to 33 young entrepreneurs from 19 African nations.
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