The African Development Bank (AfDB), in partnership with the Climate Investment Funds (CIF) on Monday commissioned the Coalition for Green Capital to prepare a study on the creation of national climate change funds and green banks in Africa.
The CGC will identify and work with six African countries to conduct feasibility studies for the project, which was initiated at the Green Bank Design Summit held in Paris in March 2019. At the Summit 23 developing countries were tasked to craft a new model to mobilise and accelerate investment in clean energy.
Commenting on the importance of the initiative, the Director of Global Green Bank Development at the CGC, Andrea Colnes said: “For countries to better access climate finance and fully engage the private sector, the climate finance system must re-orient toward national financial capacity that is able to channel capital to projects and markets where it is needed most.”
In his remarks, AfDB’s Director for Climate Change and Green Growth, Dr. Anthony Nyong, described the collaboration as a welcomed development in view of its implications for sustainable funding of climate change projects in the continent.
He said: “Green financing vehicles are increasingly recognized as a powerful instrument to mobilize private sector capital for low carbon and climate resilient development.
Their ability to access even limited amounts of local currency finance presents significant opportunities to manage risk, attract concessional finance from climate funds and crowd in private sector finance.
“We are excited to work with the team from CGC and look forward to presenting progress reports at the Green Bank Summit in 2020 and COP26”, Nyong added.
Experts believe that when paired with effective grant programmes through National Climate Change Funds and strong enabling environments and policies, locally-based Green Banks are powerful tools to address market needs, understand local risk and drive private investment.
Green Banks and National Climate Change Funds can play an important role in mobilizing finance to support low-carbon, climate-resilient development, using methods such as blended finance to drive increased private investment.
To meet their funding commitments, countries can mobilize funds from Diaspora, national financial institutions, private investors, asset managers, sovereign wealth funds, and more.
These instruments and funds can support the implementation of Nationally Determined Contributions (NDCs), CIF Investment Plans, CIF Strategic Plans for Climate Resilience and NDCs, and progress towards Sustainable Development Goals (SDGs).
