Six African countries get new support to bolster private sector's role in climate action
TUNIS, Tunisia, November 28, 2013/African Press Organization (APO)/ -- With African Development Bank (AfDB) (http://www.afdb.org) support, six African nations – Burkina Faso, Democratic Republic of Congo, Ghana, Kenya, Mali and Mozambique – made it through a global competition run by the Climate Investment Funds (CIF) to provide dedicated funding to engage the private sector in effective climate solutions. The seven project concepts endorsed for full project development in Africa focus on forests in Burkina Faso, DRC and Ghana, renewable energy in Kenya and Mali, and climate resilience in Mozambique.
The multilateral development banks (MDBs) ran the four-month competition to provide funding to garner more effective private sector involvement in projects in renewable energy, sustainable forests, and climate resilience. The selected African project concepts – a third of the 15 final winning concepts globally – will now go forward for further development by the AfDB as their CIF implementing partner.
“At AfDB, we went an extra mile through this process, and despite the time and resource limitations we carried out business identification efforts on the ground. We now look forward to working with the seven private sector sponsors in the countries to develop the concepts for full funding by next year,” said Mafalda Duarte, AfDB's CIF coordinator who spearheaded the African project concept submissions in the competition. “At AfDB, we believe that private sector engagement in climate action is critically important to stimulate markets, increase investment potential, develop climate-friendly business models, and ensure a sustainable shift for effective climate solutions.”
The CIF, along with AfDB and the other MDB partners, undertook the competition in order to help alleviate the large number of risks preventing private sector's entrance into renewable energy, energy efficiency, forestry, and climate resilience investments, particularly in developing countries. There are upfront risks for early entrants, large capital costs, a lack of suitable financing and insurance products, and a return on investment that is often slower than other better-known investments, such as fossil fuels. Mitigating these factors, along with addressing the lack of understanding of the value of climate investment and the need for new types of investment products, were the underlying reasons the CIF decided to set aside the special funds.
“Going forward, more efforts like the CIF set-asides are needed to raise awareness about business opportunities for potential private sector sponsors in developing countries, particularly for climate adaptation,” added Duarte. “We applaud these initiatives, and efforts like the set-asides must be developed across a broader horizon than the CIF pilot countries, reaching out to a wide swath of the developing world to stimulate large-scale change.”
Selected project concepts under the competition will now be fully prepared and will be presented for final funding to the CIF governing bodies in 2014.
Distributed by APO (African Press Organization) on behalf of the African Development Bank (AfDB).
About the Climate Investment Funds (CIF)
Established in 2008 as one of the largest fast-tracked climate financing instruments in the world, the $7.6 billion CIF provides developing countries with grants, concessional loans, risk mitigation instruments, and equity that leverage significant financing from the private sector, MDBs and other sources. Five MDBs – the African Development Bank (AfDB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank (IDB), and World Bank Group (WBG) – implement CIF-funded projects and programs.
Contact: Mafalda Duarte, Chief Climate Change Specialist and CIF Coordinator, ONEC [email protected]
For further information on the CIF projects supported by the AfDB, visit our January 2013 semi-annual report “Financing Change: the AfDB and CIF for a Climate-Smart Africa” (http://www.afdb.org/fileadmin/uploads/afdb/Documents/Corporate-Procurement/Departmental_Annual_Reports/2012%20CIF%20-%20Annual%20Report.pdf) and our October 2013 brochure “Growing Green: the AfDB and CIF for a Climate-Smart Africa.(http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Growing%20Green%20-%20The%20AfDB%20and%20CIF%20for%20a%20Climate-Smart%20Africa.pdf)”
About the African Development Bank Group
The African Development Bank Group (AfDB) (http://www.afdb.org) is Africa's premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 34 African countries with an external office in Japan, the AfDB contributes to the economic development and the social progress of its 53 regional member states.
For more information: j.mp/AFDB_Media