Afreximbank commits funding for just energy transition in Africa

African Export-Import Bank (Afreximbank) has doubled down on its commitment to facilitating a just energy transition for Africa that supports the continent’s critical development needs and unlocks its economic potential.

Afreximbank is participating at COP29 in Baku, Azerbaijan where it is also advocating for a swift operationalization of the Loss and Damage Fund to shield countries that are most exposed to the effects of climate change, particularly in Africa.

The Bank’s participation will align with the African Union’s Nairobi Declaration from the 2023 Africa Climate Summit and build on COP28’s actions around climate finance, loss and damage compensation, utilizing gas as a transitional fuel, and mobilizing high-quality climate finance.

Afreximbank’s efforts will integrate climate change with development goals, emphasizing the role of the African Continental Free Trade Area (AfCFTA) in fostering sustainable growth and regional integration. Importantly, the foregoing considerations will also be anchored on the core principles of the AU Agenda 2063: The Africa We Want.

The Bank further said it will push for the timely disbursement of the Loss and Damage funds to African countries to ensure that they have the resources needed to address both immediate and long-term climate impacts. It will also emphasise the importance of transparent and accessible finance mechanisms to ensure that local communities directly affected by climate change can receive the support they need.

Speaking during the African Day at African Union’s Pavilion at COP29, Prof. Benedict Oramah, President and Chairman of Board of Directors at Afreximbank stated:

“Africa is disproportionately affected by the impacts of global climate change despite being responsible for less than 4% of global emissions. Losses in economic growth, migrations and regional instability represent significant negative impacts of climate change on the continent that will probably intensify in the next decade. 

afreximbank president Prof. Benedict Oramah

Prof. Oramah added that financial resources and sound investments are critical to addressing climate change, lowering emissions, encouraging adaptation as well as building resilience. Africa for instance, he explained, needs between US$1.3 trillion and US$1.6 trillion in total climate financing every year till 2030 to meet its pressing needs.

We are at the point where taking action does not only suggest good environmental stewardship but must also be seen as a sound economic policy considering that the cost of immediate and decisive action is far less than the cost of inaction and delayed efforts. The issue of financing climate adaptation in Africa and the Island States of the Caribbean has become an emergency and as such our participation at COP29 is an opportunity to advocate for Africa and the Caribbean’s climate priorities, amplify their voice in global discussions, and push for urgent climate finance.”

Afreximbank also said it will advocate for policies and investments to accelerate Africa’s energy transition, responsibly developing the content’s abundant natural resources, ensuring adequate infrastructure to reduce energy poverty, facilitate trade, and position the continent for an accelerated and appropriate energy transition.

It will also advocate for a scaling up of the New Collective Quantified Goal on Climate Finance (NCQG), to replace the previous $100 billion pledge which has seen insufficient disbursement, and push for financial mechanisms like green bonds, concessional loans, and carbon markets to fund Africa’s climate projects.

brian@theenergyreview.com