AFRICA – Multilateral development banks participating in the 2023 UN Climate Change Conference (COP 28) have unequivocally affirmed their dedication to concerted, global action, pledging to increase co-financing and foster private sector engagement to address the acute impact of climate change in Africa.
Despite being the smallest contributor to global warming and having the lowest emissions, Africa confronts existential risks due to the catastrophic consequences of climate change.
Recurrent droughts in the Horn of Africa and recent devastating floods in Libya, Malawi, Mozambique, Zimbabwe, and other regions of the continent have resulted in substantial loss of life, infrastructure destruction, the erosion of vast hectares of food crops, and the imminent risk of pushing millions into extreme poverty.
In a collective statement released in Dubai, United Arab Emirates, the banks have committed to collaborative efforts focused on “socially inclusive, gender-responsive, and nature-positive climate and development actions,” leveraging their unique expertise and expansive networks.
Signatories to this impactful statement include the African Development Bank Group, European Investment Bank, Asian Development Bank, Asian Infrastructure Investment Bank, Council of Europe Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank Group, Islamic Development Bank, New Development Bank, and the World Bank Group.
For substantial impact, the Multilateral Development Banks (MDBs) will join forces to attract private capital on a significant scale for countries, broaden the spectrum of reporting climate results and impact, and assist nations in identifying priorities and investment opportunities.
Moreover, they have committed to endorsing countries’ efforts in adaptation and disaster risk management through the MDBs’ Early Warning for All initiative.
This initiative aims to establish accessible and inclusive early warning systems globally by 2027. Additionally, the MDBs are launching a Long-term Strategies Program to aid countries and subnational entities in formulating comprehensive, low-emission development strategies and other enduring climate strategies.
Expressing unwavering support for various sectors including water, health, and gender, the banks have pledged to identify and expand financing for gender-responsive solutions for both governments and businesses.
According to a comprehensive report released jointly by the MDBs in October, climate finance for low-income and middle-income economies from Multilateral Development Banks surged to a new record of US$60.7 billion in 2022, reflecting a remarkable 46 percent increase compared to 2019.
Of this amount, approximately US$38.0 billion, constituting 63%, was allocated to climate change mitigation finance, while US$22.7 billion, or 37%, supported climate change adaptation. Notably, private finance stood at a considerable US$16.9 billion.
This initiative follows AfBD’s announcement of creating four green banks in Africa to mobilize up to US$1.5 billion by 2030 towards green financing.
The move, through the African Green Bank Initiative, is due to a lack of climate finance made available at each successive Conference of the Parties (COP) meeting on climate crisis held by the UN.
Under the plan, the AfDB is spearheading the green investment facilities in financial institutions in Benin, Ivory Coast, Morocco and Egypt to equip local banks with the technical capacity to attract climate finance from international and domestic investors.
The African Green Bank Initiative is an initiative by the multilateral lender as a workable and realistic solution to the lack of climate finance in the continent.
It was launched at the COP27 in Egypt and aims to roll out large numbers of green banks in Africa over the next few years.
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