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African Development Bank Set To Tackle Climate Change Through Investment, Says Africa Is Choking

The Bank’s President, Akinwumi Adesina, called out developed nations for not keeping to the pledge of $100bn yearly.

On the eve of the 2023 Annual Meetings of the African Development Bank Group, the Africa Investment Forum showcased four sustainability and renewable energy projects to investors, totaling roughly $1.5 billion.

The 2023 conference titled, “Mobilizing Private Sector Financing for Climate and Green Growth in Africa” took place in Sharm El Sheikh, Egypt held a round table which was the main attraction for  a variety of private investors, including private equity and venture capital groups.

Referring to Africa as a “vulnerable region of the world”pertaining to climate change, the board expressed urgency for accelerated action in tackling climate change. They believe that the set of selected projects directed toward this cause would entail capturing a rising proportion of global finances for the continent in order to close funding shortfalls.

The seminar included a hybrid hydrogen feed stock/ammonia plant in North Africa that will use 400 MW of renewable energy to create 183 tons of daily hydrogen feed stock—without emitting any CO2—and 1,000 tons of daily green ammonia through electrolysis. To make the project bankable, an additional $27 million investment is required. 

The four transactions included a hybrid hydrogen feed stock/ammonia project in North Africa that will use 400 MW of renewable energy to produce 183 tons of hydrogen feed stock per day without emitting CO2, which will be used to produce 1,000 tons of green ammonia per day via electrolysis. Another project, a 27 MW hydro-power project, has also successfully undergone feasibility studies.

Then they discussed a chance to fund the growth into seven nations in West, Central, and Southern Africa of a $73 million plastic recycling and sustainability enterprise. Many sponsors of project preparation and technical support have expressed interest in the project in order to perform feasibility studies in the target nations.

Lastly, an opportunity to invest in a $440 million independent hydro-power project in Southern Africa that would produce 544,000 MWh of energy annually. Additionally, features for water distribution and flood protection will be included. In addition, the project will provide 3,000 construction employment.

But according to Dr. Akinwumi Adesina, president of the African Development Bank Group, the continent is “choking” due to a severe shortage of funding for combating climate change afterwards he criticized developed countries for breaking their promise to provide developing nations with $100 billion in annual climate money.

“Africa is being short-changed in climate finance. Africa is choking,” he told the journalists.

 “Your role as the media is very important to help carry the news – the news of efforts being made, challenges being faced, and the fierce urgency of now in getting much-needed climate finance to Africa.” 

Questions on the possible use of capital market instruments like green bonds to support climate-related initiatives were addressed by Adesina and the operational vice presidents of the Bank Group.  

Africa would require $2.7 trillion to pay its climate change obligations by 2030, the Bank projects.

The majority of the multinational development banks—63% of their climate finance—has been allocated to the African Development Bank, which is leading the continent’s efforts to adapt to the changing climate.

Millions of farmers have been promised to benefit from the Bank’s new Climate Action Window, which will help them get access to seeds resistant to climate change. The institute has also started the Desert to Power program, which aims to provide 10,000 megawatts of solar energy for the Sahel’s almost 250 million inhabitants.  

The African Investment Forum is Africa’s investment marketplace to speed up transactions and close Africa’s investment gaps. It is supported by the African Development Bank and seven other founding partners (Africa50, Africa Finance Corporation, Afreximbank, Development Bank of Southern Africa, European Investment Bank, Islamic Development Bank, and Trade and Development Bank).

Glamour Adah

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