Experts at the 2020 Global Philanthropy Forum has called for greater collaboration among funders to address the severe threat that climate change poses to Africa’s development.
Participants highlighted the critical role of innovative approaches to mobilising climate adaptation finance in Africa, in a session, ‘Inclusive Green Economies – Harnessing Opportunities and Innovative Solutions for Investments in Climate-Resilient Development in Africa.’
The virtual session, organised by the African Development Bank, began with a call for sustainable ways for the continent to emerge stronger from the pandemic.
The event was moderated by Emily Ojoo-Massawa, the Senior Associate at the Global Climate Adaptation Partnership.
“The path to a sustainable COVID-19 recovery will therefore require investments that simultaneously tackle the pandemic and prevailing climate risks while offering attractive co-benefits,” said Al Hamndou Dorsouma, Manager of Climate and Green Growth at the bank.
“The moment for adaptation has come. Interestingly, we have the attention of philanthropy, private sector and non-traditional investors, who want to invest in harnessing new opportunities in climate change adaptation,” said Arame Tall, Senior Adaptation and Resilience Specialist, Climate Change Group at the World Bank.
“We need the ministries of finance to be involved in outlining adaptation investment opportunities in countries to better harness these opportunities, including clear investment and sectoral plans.”
In October 2018, the bank’s board of directors approved a framework for the implementation of the Africa Disaster Risk Financing programme, which offers regional member countries an opportunity to pool and transfer their climate-related risks by paying a sovereign insurance premium.
The bank partners the African Risk Capacity Insurance Company to implement ADRiFi.
Lesley Ndlovu, CEO of ARC, noted the need for countries to plan for exposures and build resilience.
“At the African Risk Capacity, we work with countries to prepare them for the risk exposure they have and help them prepare for how to respond, including helping them to establish a rainy-day fund. We have also partnered the African Development Bank for the Africa Disaster Risk Financing initiative and other financing instruments,” Ndlovu said.
“We need broader collaborations to solve the problem that our continent faces. The problem is so big that all of us have a role to play.”
Africa is among the world’s most climate-vulnerable regions, and the economic cost is high, as much as $15bn in 2020, rising to potentially $50bn by 2040, which is equivalent to seven per cent of the continent’s gross domestic product.
Doursouma noted that the bank was on track to mobilise $25bn between 2020 and 2025 to support investments in climate change.
In 2019, AfDB prioritised adaptation finance, with 55 per cent of its climate-focused financing invested in adaptation actions.
The bank’s adaptation finance rose from $500m in 2012 to $2bn in 2019, cumulatively representing $18.6bn over this period.
