The African Development Bank emphasized the urgent need for collective action to address the severe drought affecting various regions in Africa, highlighting the importance of enhanced support and financing for the continent.
Akinwumi Adesina, President of the African Development Bank Group, reiterated this stance during a high-level roundtable on climate finance held at the International Monetary Fund and World Bank Spring Meetings.
The event was organized by UK Deputy Foreign Minister and Minister of State for Development and Africa, Andrew Mitchell, along with German Minister for Economic Cooperation and Development, Svenja Schulze, in the United States of America.
Adesina said “Africa is in the eye of the storm from climate change, accounting for 9 out of the 10 most vulnerable countries to climate change globally,” Adesina told participants.
“But Africa is not getting what it needs to adapt to climate change. Africa received just $30 billion per year for climate adaptation, while its needs are $277 billion per year, leaving a huge financing gap.”
While noting that the African Development Bank was delivering on its promise, Adesina said “The African Development Bank set a target to devote 40% of its total financing to climate finance. We have exceeded this target consistently in the past three years, consecutively, and stood at 55% in 2023.”
The African Development Bank has significantly increased its climate finance efforts, surpassing its funding goals for African nations.
To bolster climate finance, the Bank has introduced several groundbreaking initiatives. Notably, it issued a pioneering $750 million hybrid capital issuance in the global capital markets, a milestone unmatched by other multilateral development banks. This initiative was immensely successful, with subscriptions reaching $6 billion.
In response to global financial reform demands, Adesina highlighted the Bank’s innovation in establishing the Climate Action Window as a key component of the 16th replenishment of its African Development Fund.
He described it as “first among all multilateral development banks”.
With initial funding of $429 million from development partners Germany, the UK, The Netherlands, and Switzerland, the African Development Bank plans to increase this to $13 billion.
Adesina told the audience: “The Climate Action Window will directly support the low-income and most vulnerable countries on climate adaptation, mitigation, and technical assistance. The first call for proposals for adaptation elicited $4 billion of projects, ten times the size of the total facility, confirming the massive demand for adaptation finance by countries.”
To further leverage climate finance, the African Adaptation Acceleration Programme—the flagship programme of the African Development Bank and the Global Center on Adaptation—is mobilising $25 billion for climate adaptation. It is the largest climate adaptation programme in the world.
Also speaking at the meeting, World Bank Group Ajay Banga encouraged stakeholders to remain determined to move forward despite existing frustrations.
He said, “The first thing is not just to raise money, but to raise the capacity of countries in terms of getting bankable projects and also the capacity to execute them. We need to find a way to support countries with knowledge.”
Other speakers at the roundtable described the situation as dire and underlined the urgent need for stakeholders to work more collaboratively as a system.
This includes forward-looking and country-led planning, policies, and partnerships to maximise support and climate finance from financial institutions and the private sector.
Kenya’s Cabinet Secretary for National Treasury and Economic Planning, Njuguna Ndung’u, called for massive funding to finance adaptation programmes, highlighting the link between climate change and development.
Ndung’u said, “We also need to demonstrate that we have projects that can work, adding that the country’s Renewable Energy Integration (REI) investment programme allows national governments and country levels to commit resources. It helps us find national solutions.”
Finance Minister Jon Salong Dahmasing of Vanuatu echoed this message, highlighting how small island developing states constantly need to respond to emergencies. He said this makes it difficult for them to focus on the Sustainable Development Goals.
“We have capacity limitations making it difficult to access funds unless we have capacity support, including capacity to deliver bankable projects and how to access the funding that is available across the world,” he said.
Speaking earlier, UK Minister Andrew Mitchell stressed the urgency of getting the world to unite to finance adaptation.
He explained that adaptation required critical global attention, stressing that the next few years would be critical for developing countries facing natural shocks.
Mitchell said, “We need to collectively deliver on the COP26 pledge to double adaptation finance by 2025. We need to work on meeting the COP 26 targets… We are seeing the devastating impact of climate change in the developing world. Humanitarian crises are getting more frequent… and we fear that they will get worse.”
He told the roundtable that the UK was going further by tripling adaptation financing, majority of which will be by grants.
