Cop28: De-risking Africa’s green investment value chain

Africa stands at a crossroads as it grapples with the urgent need for climate action and sustainable development. In a bid to de-risk green investment vehicles and attract private investors to fund green projects, Audrey-Cynthia Yamadjako, the Co-Ordinator of the Africa Green Bank Initiative, emphasizes the importance of creating a range of financial products. In an exclusive interview with CNBC Africa's Fifi Peters at Cop28 in Dubai, Yamadjako shed light on the critical role of financial institutions in driving green investments across the continent. Yamadjako highlighted the pressing nature of climate action and the immense opportunity presented by the $2.8 trillion investment potential by 2030 across 51 African countries and the Democratic Republic of the Congo(DC). Partnering with organizations like the Climate Investment Fund, Canada Climate Action, and Amundi, the largest asset manager in Europe, the Africa Green Bank Initiative is working towards establishing green investment vehicles embedded within commercial banks to support climate initiatives and provide practical solutions for African governments. The key theme of the discussion revolved around the imperative to attract private finance into local projects and lay the foundation for a sustainable green investment future in Africa. Here are three key points from the interview: 1. Creating a Green Investment Ecosystem: The Africa Green Bank Initiative aims to establish an ecosystem of green finance vehicles within existing commercial banks. By providing project preparation facilities, lending windows, de-risking instruments, concessional loans, guarantees, and equity participation, the initiative seeks to unlock private capital for green investments. 2. Mobilizing Finance for Local Projects: With only 13% of climate finance in Africa sourced from the private sector, there is a critical need to shift this paradigm. The initiative focuses on mobilizing domestic and external investments to support local project developers and make green finance more accessible. By structuring green investments, measuring impact, and creating supportive financial structures, the initiative aims to boost private sector involvement. 3. Enhancing Resilience and Inclusivity: Against the backdrop of climate vulnerabilities faced by African nations, initiatives like the Loss and Damages Fund play a crucial role in providing emergency funds when adaptation measures fall short. However, there is a pressing need for increased commitments from developed nations to address the substantial financing requirements of African countries, which were estimated at $300 billion annually. Yamadjako underlined the significance of the funds in bolstering resilience and inclusivity for a sustainable future in Africa. The urgent call for more commitments and innovative solutions to bridge the financing gap underscored the critical need to align global efforts towards a common goal of addressing climate challenges in the region. In conclusion, as the coordinator of the African Green Bank Initiative, Yamadjako's mission at Cop28 was centered on advancing practical solutions and capitalization efforts associated with green finance initiatives across the continent. By leveraging partnerships, driving sustainable trust fund initiatives, and capitalizing on concessional funding opportunities, the initiative aims to pave the way for a greener, more prosperous future for Africa.