Mobilizing resources from the private sector will be key to bridging the financing gap that has undermined Africa’s capacity to tame the escalating climate crisis, senior officials from the African Development Bank (AfDB) said Wednesday at a forum in Nairobi, the Kenyan capital.
Nnenna Nwabufo, the director-general for the East Africa Region at the AfDB, stressed that the continent should leverage capital and technology from indigenous businesses to boost green financing amid shrinking external support.
“Our level of economic development has made it difficult to accelerate climate action and that is why we need innovative ways to increase climate financing,” she said at a regional civil society forum convened by the AfDB.
Nwabufo said that Africa’s private sector deserves some fiscal and regulatory incentives to boost its contribution to green financing.
According to the AfDB, African countries should mobilize 213 billion U.S. dollars annually from the private sector to bridge the climate financing gap by 2030, given the strain on public finances.
In addition, the continent requires 242.4 billion dollars annually until 2030 to support the implementation of carbon emission reduction targets known as Nationally Determined Contributions, the AfDB said.
The continent received a partly 4.2 billion dollars in private climate finance in the 2019-2020 period, equivalent to 14 percent of total climate finance flows of 29.5 billion dollars, the lender noted.
Nwabufo revealed that the AfDB intends to raise 10 billion dollars in the medium term to boost climate financing in Africa and hasten the implementation of projects that advance resilience across key economic sectors.
Josephine Ngure, country manager at the AfDB, said African governments should design commercially viable green projects across energy, agriculture, forestry, water and manufacturing sectors to attract private sector financing.
According to Ngure, the continent should unlock private sector investments in renewable energy, climate-smart agriculture and green technologies through knocking down regulatory barriers.