African Development Bank climate change specialists will gather on the sidelines of COP26 to champion climate adaptation in East Africa and discuss opportunities for mobilizing resources to support the cause.
On November 8, the African Development Bank and partners will make a case for a comprehensive adaptation financing framework that responds to the multiple climate risks directly impacting the economic and social systems of the highly vulnerable region. The event will feature a session on East Africa, a region that has been hit hard by the impact of climate change.
The African Development Bank is one of many development partners at COP26 to push Africa’s climate agenda and the need for urgent and sustainable climate financing for vulnerable countries.
This issue took centre-stage at a virtual briefing dubbed Africa-Europe Dialogue on African Climate Finance Priorities for COP26, organized by the South African Institute of International Affairs (SAIIA) in partnership with the Konrad Adenauer Stiftung. The October 25 event sought to gather views from African and European climate stakeholders on opportunities for achieving climate resilience.
During the event Olivia Rumble, Director of the South Africa-based Climate Legal, said the Covid-19 pandemic had a drastic impact on climate financing.
“Most of the climate financing in adaptation is happening from national budgets and that jeopardizes the already dwindling resources that African countries have to deal with adaptation because very little financing goes to addressing the issue,” she said.
Dr. Olufunso Somorin, the African Development Bank’s expert for Climate Change and Green Growth, noted that there was a huge disparity between mitigation and adaptation finance, even though the latter should be a priority for Africa because of its vulnerability to climate change. He attributed the financing gap to the fact that there was no specific adaptation financing framework.
Somorin said between 2014 and 2018, 57% of adaptation finance in sub-Saharan Africa was through loans, while 42% was through grants; mainly through just two sectors: agriculture, and water supply and sanitation.
Most Nationally Determined Contributions (NDCs) submitted by African countries list their adaptation projects. However, the business case for private investment falls short, Somorin said.
Other innovative products that offer opportunities to the continent include climate resilience bonds, debt for climate swaps, guarantees, risk-sharing facilities and equities.
The African Development Bank has committed to dedicating half of its climate finance to adaptation, and novel instruments such as green and resilience bonds have the potential to improve private finance flows.
According to Jonathan First, Managing Director of GFA Climate and Infrastructure, there are several reasons why climate finance flow is limited on the continent, but one factor was key. “We are not creating a bankable pipeline of infrastructure for both concessional funders and the private sector to invest in,” he said.
Stefano Signore, Head of the Climate Change and Sustainable Energy Unit of the European Commission, agreed.
“Everybody recognizes and understands that adaptation is a priority; what is missing is the sufficient number of bankable projects,” he said, adding: “There is capacity to support financially those kinds of projects but they are not enough.”