Study has revealed that green banks and national climate funds have key role to play in mobilising funds for low-carbon, climate-resilient development in Africa.
The study, jointly produced by the African Development Bank and the Climate Investment Fund, was released on Tuesday.
The study is expected to underpin development of a multi-country climate finance initiative in Africa.
It showed that for countries to better access and mobilise private investment, the climate finance system must re-orientate towards national financial capacity that could channel capital to projects and markets where it was most needed.
National green banks are powerful tools to address market needs, and drive private investment, it further revealed.
Using Ghana, Zambia, Uganda, Tunisia, Mozambique and Republic of Benin to explore the possibility, the study found that a combination of green banks working alongside national climate change funds has the potential to scale private investment in support of the climate and Sustainable Devevelopment Goals.
It further showed that two sectors stood out across the study countries, which were renewable energy and climate-smart agriculture.
Acting Director for Climate Change and Green Growth at AfDB, Dorsouma Al Hamdou, said, “As we look towards what will be needed to progress from emergency aid relief to medium- to longer-term measures to build resiliency and re-grow developing economies, the role of catalytic, innovative finance capacity to support sustainable infrastructure and social investment through mobilising public and private resources will be essential.
“Green banks and national climate change funds are well positioned for this role and support economic recovery and job growth through the rebuilding of green development sectors such as agriculture, renewable energy, and green cities.”
Andrea Colnes of the Coalition for Green Capital said the green bank model had demonstrated its effectiveness in other regions of the globe and had great potential in Africa.
Green banks with national climate change funds have significant potential in Africa, based on their effectiveness at driving clean energy investment around the world, Colnes said.
“To date, members of the Green Bank Network have leveraged more than $24bn in public capital to finance more than $70bn in clean energy projects.
“This investment has supported jobs, economic development and avoided more than 25 million tonnes of CO2 emissions annually,” Colnes added.
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