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