International Parliamentary Conference on Climate Change

July 2010

The Role of MDBs in Tackling Climate Change

Dr. Anthony Nyong

African Development Bank

Outline of Presentation

Role of MDBs in Financing Climate Change

How Much Climate Change Finance Do MDBs Provide

Constraints and Prospects for Effective Climate Change Financing

The African Development Bank: Rising to the Challenge in Africa

Role of MDBs in Climate Finance MDBs’ mandate on Sustainable Development

is burdened by Climate Change MDBs able to integrate climate across their

strategic priorities, supporting a coherent approach to development.

‘Climate Proofed

Abatements’

AdaptationMitigation

Development

Low Carbon Dev

‘Climate Resilient

Dev‘Climate

Compatible Development’

Source: Catalyst, 2009

Climate Change interventions must be rooted in Development, aligned with mitigation &

adaptation

MDBs’ Response to Climate Change

Increasing climate change analytical, policy and capacity building support.

identified and developed programs to assist developing countries

Provide innovative climate change financing instruments

Leveraging private sector capital

Instrumental to development of carbon markets and reduction of GHG emissions

MDB Climate Change Finance

2007 2008 2009 2010Energy

Lending/ Investments 10 13.8 15.7 16.2Total cost of projects/ programmes supported 24.9 35.8 39.5 42.4Energy Access

Lending/ Investments 2.4 4.4 5.3 5.8

Total cost of projects/ programmes supported 7.5 12.2 14.9 17.4Low Carbon

Lending/ Investments 4.7 7.6 9.4 10.6Total cost of projects/ programmes supported 15.4 28.6 36.2 41.3CTF n.a. n.a. 9 15

How Much is Mobilized (US$ billion)?

Source: MDB Joint Report to the Hokkaido G8 (Richard Stern, 2010)

Regional Distribution of MDB Climate Change Financing

Region 2006 2007 2008 2009 2006 - 2009

Shares 2006 -2009

Africa 0.8 1.4 1.5 1.3 5.0 12%Asia/Pacific 1.2 1.5 4.1 3.7 10.6 26%EMENA 2.6 3.5 3.5 5.3 14.8 37%LACC 0.9 0.7 1.5 6.8 9.8 24%Total 5.5 7.0 10.5 17.1 40.1 100%

Where is the Money Spent?

Regional disparity exacerbated by Focus on Mitigation

MDBs’ Climate Change Financing

Shareholder Capitalization

Replenishment

Concessional Trust Funds

Capital Market

How Do MDBs Generate Climate Finance?

Climate Change merits careful consideration in negotiations on these options

African Development Bank & Climate Change Financing in Africa

Enormous Additional Burden to Development

BUT, Opportunities exist for climate-resilient and low carbon growth in Africa

Climate Change and Africa Cost of adaptation and of putting Africa on a low

carbon growth pathway at about US$22-31 billion per year by 2015, and $52-68 billion per year by 2030.

« Climate-proofing » will add 40% to the costs to meeting the MDGs in Africa.

This would require international financial assistance of some US$ 100 billion a year over the next decade

These costs are low in comparison with the economic benefits of adaptation and mitigation

What Africa Needs to Adapt

Enhancing resilience for future

investment

Social Protection

Accelerated Development Adaptation to

Current Climate (development)

but essential for future resilience

2012 2030

Costs of Adaptation to Current and Future Climate in Africa $Billion per year

Immediate priorities and capacity building

Adaptation to Future Climate

Change$50 Billion.

$40 Billion.

$30 Billion.

$20 Billion.

$10 Billion.

AfDB and Climate Change in Africa

Components of the Strategy

US$ 11 billion Climate Change Investment: 2010-2014

Regional co-generation Initiatives in Eastern and Southern Africa.

Lake Turkana Independent Wind Power project Financed about 100 operations worth approximately

US$ 2.8 billion in the Congo Basin forests (world’s second largest rainforest)

Major analytical pieces of work leading towards an African Green Development Strategy for Africa.

Support to strengthen Regional African Climate Institutions through the ClimDev-Africa Special Fund.

Off-setting of Carbon emissions for Major Corporate Events and travels

MDB Climate Change FinanceExamples of Good Practices from AfDB

Financing Climate Change Interventions in Africa

Africa’s Low Access Rate to Global Resources

AfDB has Comparative Advantages to Host and Manage Africa’s Resources

Africa’s needs are enormous and the AfDB has demonstrated capacity to deliver.

Africa Requires Substantial Resources and Effective Financing Instrument

Conclusion MDBs have an important role to play in addressing

climate change challenges Effective interventions by MDBs depend on availability

of new and additional resources African Development Bank, Committed to helping

Africa address Climate Change Challenges: Competing demands, limited resources

Requires substantial resources to meet the growing demands from Regional Member Countries

Responded to Requests by Africa’s Leadership to Host and Manage the Africa Green Fund.

Created a Department of Energy, Environment and Climate Change and substantially ramped up its capacity

Thank You

For Further Detailswww.afdb.org