Climate finance allocated by the African Development Bank (AfDB) increased further in 2019 from 32% to 35% of total annual project approvals. This is according to the new Multilateral Development Bank (MDB) report on climate finance, released on August 6, 2020.
Climate finance continues to gain ground in the financing provided by the African Development Bank (AfDB). According to the Multilateral Development Bank (MDB) Climate Finance Report 2020, in 2019 the AfDB has committed USD 3.5 billion across the continent to finance climate change mitigation and adaptation projects, with the main sectors targeted being renewable energy and resilient agriculture. This climate financing represents 35% of the total 2019 approvals of projects worth US$ 10.2 billion, representing an increase of 0.3% over 2018 and 26% over 2016.
“As African economies face the devastating effects of the Covid-19 pandemic, relaxing action or redirecting financial resources away from climate change will further exacerbate these impacts in diverse and complex ways,” says Anthony Nyong, AfDB Director for Climate Change and Green Growth. In its report on climate finance published in 2019, the pan-African financial institution pledged to allocate 40% of its project approvals to climate change financing by 2020.
Essential finance for achieving the objectives of the Paris agreement
The climate funds released by the AfDB are crucial for compliance with the resolutions of the 21st United Nations Framework Convention on Climate Change (Cop21), adopted on December 12, 2015 in Paris, France. These funds enable the member countries of the African Development Bank (AfDB) Group to implement their Nationally Determined Contributions (NDCs). Among other things, this results in the implementation of innovative projects in the energy sector, climate resilience, sustainable forest management and the mobilisation of additional funds from public and private sources.
It should be noted that at the global level, climate financing is also increasingly flowing. The total of such financing provided in 2019 by all seven the Multilateral Development Banks (MDBs) of the world amounts to a record $61.6 billion. This is an increase of 30% from the $43.1 billion that was released in 2018.