AfDB Annual Meetings: AfDB’s Adesina on how to bridge the climate finance gap in Africa

The President of the African Development Bank Group, Akinwumi Adesina, is spearheading efforts to bridge the climate finance gap in Africa. In a recent interview with CNBC Africa, Adesina discussed the critical need for mobilizing resources to tackle climate change on the continent. He highlighted that Africa loses between $7 billion to $15 billion annually due to climate change, a figure that could rise to $50 billion by 2030 if immediate action is not taken. Adesina stressed the importance of securing $2.7 trillion by 2030 to meet Africa's climate commitments as outlined in its nationally determined contributions. However, Africa is only receiving $30 billion annually in climate finance, significantly below the needed amount. To address this disparity, the African Development Bank has stepped up its efforts by committing 40% of its financing to climate-related projects, surpassing the target with 47% already allocated. Moreover, the bank has directed 67% of its investments towards climate adaptation, exceeding the global standard of 50% for adaptation set by UN Secretary General Guterres. Adesina further emphasized the launch of the African Adaptation Acceleration Program in partnership with the Global Centre on Adaptation, aimed at mobilizing an additional $25 billion for climate adaptation in Africa. Adesina underscored the vital role of the private sector in closing the climate finance gap. With approximately $145 trillion in global assets under management, Adesina emphasized the need for bankable projects and risk mitigation strategies to attract private sector investments into climate finance and green growth initiatives in Africa. Noting the importance of a stable policy environment, Adesina highlighted the African Development Bank's efforts to de-risk investments through partial credit and risk guarantees. The bank's successful Africa Investment Forum, which has mobilized $143 billion in investments over the past three years, serves as a testament to its commitment to attracting private sector participation in Africa's development. Adesina also addressed the global financial architecture's role in supporting Africa's development, calling for better coordination among financial institutions, including the World Bank and IMF. He outlined the need for multilateral development banks to adapt their business models to attract more private sector funding, citing the African Development Bank's innovative approaches such as synthetic securitization and leveraging IMF special drawing rights. Adesina highlighted the bank's success in meeting the reserve asset quality standards for SDRs, paving the way for developed countries to rechannel funds to Africa through the bank. Adesina expressed optimism regarding potential contributions from countries like Japan, the UK, Saudi Arabia, and the UAE, signaling a positive outlook for leveraging additional resources for Africa's development. The African Development Bank under Adesina's leadership continues to lead the way in advancing climate finance and sustainable development initiatives in Africa through innovative financing models and strategic partnerships.