AFDB harps on call for urgent action on climate finance

African Development Bank Group President, Akinwumi Adesina, has emphasized the critical need for accelerated action on climate finance as African nations grapple with the escalating impacts of climate change.

Adesina highlighted that Africa requires a staggering $277 billion annually to effectively confront this challenge, during a high-level roundtable on climate finance held at the International Monetary Fund and World Bank Spring Meetings.

The roundtable, co-convened by UK Deputy Foreign Minister Andrew Mitchell and German Minister for Economic Cooperation and Development Svenja Schulze, underscored the urgency of addressing the pressing issue.

Adesina stressed that the ongoing devastating droughts across various parts of Africa underscore the imperative for comprehensive support and financing to bolster the continent’s resilience.

Adesina pointed out that Africa remains disproportionately affected by climate change, with nine out of ten of the world’s most vulnerable countries located on the continent.

Despite this, he lamented the glaring disparity between the $30 billion Africa currently receives for climate adaptation and the $277 billion needed annually, leaving a substantial financing gap.

To bridge this chasm, the African Development Bank has intensified its efforts, surpassing its financing targets for African countries.

Notably, the bank introduced innovative measures, such as a groundbreaking $750 million hybrid capital issue in global markets, which garnered an overwhelming response, reaching $6 billion. Additionally, the bank’s “room-to-run” transaction, backed by a $2 billion guarantee from the United Kingdom, unlocked an additional $2 billion for climate finance.

Adesina reaffirmed the bank’s commitment to climate action, highlighting its pledge to allocate 40% of its total financing to climate-related initiatives.

The roundtable, attended by key figures including World Bank Group President Ajay Banga and Prime Minister Mia Mottley of Barbados, emphasized the crucial role of partnerships and collaboration in delivering climate finance to the most vulnerable countries.

Participants stressed the necessity of enhancing capacity in these nations to effectively utilize the funds, develop viable projects, and support smallholder farmers.

Despite existing challenges, stakeholders, led by Banga, reiterated their determination to forge ahead in tackling the climate crisis through concerted efforts and cooperation.