Enhancing Africa’s Access to Climate
Financing and Green Growth Funding in
Africa
Green Growth Workshop
Lusaka, Zambia
15-16 January, 2013
Dr. Yogesh Vyas
Senior Consultant
Formerly Senior Advisor, OIVP
African Development Bank
Africa’s Exposure to “Runaway”
Climate Change
2
Climate Damages as % of GDP
3
The Global Finance Landscape
4
Source: Climate Policy Initiative, 2011
Africa’s Climate Finance Flows
5
Africa currently receives far less climate finance than it requires
Source: CPI (2011), UNEP RISOE database and Vivid Economics/AfDB (2011) and (forthcoming)
0
10
20
30
40
50
60
Current flows Future needs
US
D b
illi
on
Adaptation Mitigation
Additional Cost of Sustainable Development in Africa
6
25
15
50
25
20 135
0
20
40
60
80
100
120
140
160
Adjusted NetSavings
Biodiversity MillenniumDevelopment
Goals
Adaptation Mitigation Total
Fin
an
cia
l re
so
urc
es
ga
p (
$ b
illi
on
s)
AfDB Green Investment Funds
AfDB Statutory Resources
Non-sovereign
Operations
De
bt
Equity
Guara
nte
es
Sovereign lending
Concessio
nal
Gra
nts
Non-c
oncessio
nal
AfDB-managed Donor
Resources (TFs,
programs, etc.)
SC
AF
AC
SP
SE
FA
Additional External Resources
Strategic Climate Funds
SR
EP
PP
CR
FIP
CT
F
GE
F
Other Initiatives:
FAPA, AWF,
CBFF, NEPAD-
IPPF, RWSSI,
ICA, AFP,
ClimDev Africa .
Climate Investment Funds (CIFs)
CLIMATE INVESTMENT FUNDS
Clean Technology Fund (CTF) Strategic Climate Fund (SCF) CTF Worldwide CTF in Africa AfDB Channeling
USD 5 billion USD 1.9 billion
USD 757 million
SCF Worldwide SCF in Africa AfDB Channeling
USD 2 billion USD 615 million USD 250 million
Demonstrate, deploy and transfer of low-carbon technologies for low emission development
Targeted programs to pilot new approaches to initiate transformation with potential for scaling up climate resilience
Pilo
t
Pilot Program for Climate Resilience
(PPCR)
Forest Investment
Program (FIP)
Scaling Up Renewable Energy
Program in Low Income Countries
(SREP)
Renewables, energy efficiency, urban transport, commercialization of sustainable energy finance
Mainstream resilience in development planning
Reduce emissions from deforestation and forest degradation
Create economic opportunity, increase energy access through renewables
Egypt, Morocco, Nigeria, South Africa and MENA Region (Algeria, Egypt, Jordan, Morocco, Tunisia)
Mozambique, Niger, Zambia
DRC, Burkina Faso, Ghana
Ethiopia, Mali, Kenya, Tanzania, Liberia
9
GEF Focal Areas and Cross-cutting Issues
Cross-Cutting Issues
• Sustainable Forest Management
• Sound Chemicals Management and Mercury Reduction
• Capacity Development
31%
32%
12%
4%
14%
2% 5% Biodiversity
Climate Change
International Waters
Land Degradation
Multi-Focal
Ozone Depleting Substances
Persistent Organic Pollutants
The GEF
Adaptation Funds
LDCF SCCF
The Least Developed
Countries Trust Fund (LDCF)
is a voluntary trust fund
established under the UNFCCC
to address the special needs of
the 48 Least Developed
Countries (LDCs) vulnerable to
the impacts of climate change.
It’s the only existing fund whose
mandate is to finance the
preparation and implementation
of the NAPAs
The Special Climate Change
Trust Fund (SCCF) is a voluntary
trust fund that finances activities,
programs, and measures relating
to climate change.
Source: The Global Environment
Facility 10
New and additional fast-track resources - $30 billion by 2012?
Mobilizing additional $100 billion annually by 2020 to address needs of developing countries?
Africa’s leadership requested ring-fencing of resources for Africa to be managed by the African Development Bank.
The Africa Green Fund is a response to
Green ClimateFund
The Green Climate Fund could represent a watershed
in the flow of climate finance to Africa, if it address the
following concerns:
◦ Scaled-up to meet Africa’s needs;
◦ Respects country-ownership;
◦ Recognizes the ‘urgent need’ in African states for
adaptation, and builds adaptive capacities;
◦ Encourages direct access in what may become ‘the
main global fund for climate change finance
The Green Climate Fund 12
13
1. prepare a credible, robust pipeline of
funding opportunities
2. take early steps to create the
infrastructure needed to access the
GCF
3. build a cross-departmental dialogue
on the opportunities provided by the
GCF and direct access
Three actions for African countries to access GCF
Getting Africa ready for the Green
Climate Fund
1. support the capacity of African NIEs before
and after accreditation
2. increase its attractiveness as a Multilateral
Implementing Entity (MIE) for African
partners
3. support the development of Africa-specific
climate change and/or green growth action
plans
Roles for the AfDB’s Africa Green Facility (AfGF) in enhancing access to GCF
Getting Africa ready for the Green
Climate Fund 14
The AfGF is a platform to address the financing gaps and provide the requisite support for climate change and green growth initiatives in Africa.
The platform brings together a number of existing and new finance instruments to enhance Africa’s access to resources flows to RMCs.
The Africa Green Facility (AfGF)
STEP 1: Enhancing Access to Existing Climate Change
Instruments Managed by AfDB
o Streamlining and harmonising existing thematic funds managed by the Bank (AWF, CBFF, SEFA, ClimDev-Africa); and simplifying operational procedures to improve access.
o Raise awareness and build capacity to develop and implement climate change and Inclusive Green Growth operations.
o Identify appropriate operations for sustainable development.
STEP 2: New Green Facility for Africa (GFA)
o Will seek to receive, manage and deliver
resources from long-term pledges under the Cancun Agreements and other sources.
o Provide technical and financial assistance for the implementation of climate change and green growth operations.
o Over time, the instrument will be scaled up to become one of the main conduits to channel financial resources at scale to Africa, including from the Green Climate Fund (GCF).
Africa Green Facility Platform (AfGF)
Key Messages
16
Financial resources required to combat climate change and grow greener economies in Africa are considerable.
Despite recent improvements, Africa’s climate finance disbursement is not commensurate to its needs.
Dedicated climate funds remain relatively small in global terms, particularly Funds under the Convention, but place increasing emphasis on Africa.
The current paradigm of climate finance may sometimes fail to match Africa’s needs and has implications for the design of the Green Climate Fund (GCF).
The AfDB is committed to increasing Africa’s access to climate finance and sustainable development.
Thank you.
17