The mission presentations, as well as the board of directors of the African Financial Alliance on Climate Change (AFAC), are part of the achievements of the African Investment Forum (AIF). The initiative, launched by the AfDB, is responsible for catalysing more African investments in climate-related projects.
In Africa, the contribution of States to achieving the Paris climate objectives (also known as COP21), which is to limit global warming to 2°C by 2100, very often comes up against a lack of funding. According to the African Development Bank (AfDB), the continent’s share of global climate financing stood at around 3% at the end of 2016. A paradoxical situation, for a continent where climate change is accompanied by unparalleled effects. UN studies indicate that some 240 million Africans are already suffering from hunger. By 2050, an increase from about 1.2 to 1.9 degrees Celsius will suffice to increase the number of undernourished Africans by 25 to 95% (+ 25% in Central Africa, + 50% in East Africa, + 85% in Southern Africa and + 95% in West Africa).
The African Financial Alliance on Climate Change (AFAC) was born in this context. The African Development Bank (AfDB) structure will mobilise private capital for low-carbon and climate-resilient development on a continental scale in four key areas: knowledge sharing, instruments, disclosure and risks and opportunities that are relevant to the African ecosystem. In addition, AFAC will help to position and align African financial actors as key stakeholders in the global climate change financing architecture, by proposing solutions and attracting capital for African climate actions that support the Paris Agreement.
The AFAC was launched at the AIF 2018 in Johannesburg
The governing principles and the AFAC Steering Committee were present at the African Investment Forum (AIF) from 7 to 9 November 2018 in Johannesburg, South Africa. In his address, Lord Nicholas Stern, Chairman of the Steering Committee, said: “This Alliance is an important initiative to engage the African financial sector in the fight against climate change. AFAC will provide a vital foundation for governance, strategy and risk/return measures in governance and climate for low-carbon and climate-resilient investments.
The launch of AFAC follows a meeting organised by the AfDB on the sidelines of its annual meeting in South Korea from May 21 to 25, 2018. The young structure will have as partners: central banks, insurance companies, sovereign and pension funds, stock exchanges, commercial and development banks.