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AfDB pledges $25bn to combat climate change

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AfDB pledges $25bn to combat climate change

The African Development Bank (AfDB) will double its climate finance commitments for the period 2020-2025, the Bank’s President, Akinwumi Adesina announced yesterday at the One Planet Summit taking place in Nairobi. The AfDB boss who spoke at a plenary in the presence of Heads of State, including President Uhuru Kenyatta of Kenya, and French President Emmanuel Macron, also said that the lender would commit at least $25 billion towards climate finance.

Besides, he announced the Bank is on course to achieve its target of allocating 40 per cent of its funding to climate finance by 2020, a year ahead. He noted that the AfDB’s commitment on the target, the highest among all multilateral development banks, has progressed steadily from 9 per cent in 2016 to 28 per cent in 2017 and 32 percent in 2018. Adesina said: “The required level of financing is only feasible with the direct involvement of the entire financial sector. Consequently, the Bank launched the African Financial Alliance for Climate Change (AFAC) to link all stock exchang-es, pension and sovereign wealth funds, central banks and other financial institutions of Africa to mobilize and incentivize the shift of their portfolios towards low carbon and climate resilient investments.”

Moreover, he said: “It is not good enough to simply ask countries to stay away from polluting technologies. We have to be proactive in exploring alternatives. We will therefore be launching the ‘green baseload’ facility under the Sustainable Energy Fund for Africa (SEFA 2.0) to provide concessional finance and technical assistance to support the penetration and scale-up of renewable energy, to provide affordable and reliable renewable energy baseload.” According to him, several donors, including Canada, Denmark, Germany, Norway, Italy, the UK and USAID have indicated their interest in this transformative instrument, which will also help to replace coal. The AfDB has played a critical role in building Africa’s clean energy capacities. For instance, the Bank’s last investment in a coal project was 10 years ago.

Additionally, and in line with its ambitious New Deal on Energy for Africa, 95 per cent of all Bank investments in power generation over the 2016-18 period have been in renewables. Also, the lender’s “Desert to Power” program, a $10 billion initiative to build a 10 GW solar zone across the Sahel—the largest in the world— would provide electricity for 250 million people. Together with partners such as the Green Climate Fund and the EU, the Bank has now financed the first project under this Initiative: The Yeleen Rural Electrification Project in Burkina Faso.

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