eBusiness Weekly
Business Writer
Developed economies must honour their commitments to developing nations towards climate finance, Afreximbank President Prof Benedict Oramah has said.
In his opening speech for the Head of State Panel on the theme “New Climate Finance Architecture” President Oramah commented that “the problem hasn’t been the deficit of ideas, but the lack of action on the part of almost all stakeholders”.
“In the absence of firm global action, Africa is implementing concrete actions and putting forward pragmatic proposals to mobilise global resources to deal with the challenges of climate change,” President Oramah said.
President Oramah is leading an Afreximbank delegation that is participating at the in the inaugural Africa Climate Summit, at which leading decisionmakers — from Africa and the wider international community — are gathering to discuss Africa’s exposure to climate change and its associated costs, with solutions and commitments for action to be formalised in the “Nairobi Declaration”.
The event — convened by the African Union and hosted by the Government of Kenya — aims to create a forum in which government officials, policymakers, climate experts, businesses, civil society organizations, and international delegates can develop Africa-centric solutions which can be presented to the broader global community at the forthcoming COP28 in Dubai in November.
Afreximbank’s participation reflects the institution’s recognition of the centrality of climate change among Africa’s various challenges, as rising temperatures and sea levels, droughts, and floods further constrain the continent’s economic development.
At the Summit, the Afreximbank delegation led by President Prof Benedict Oramah is contributing to high-level discussions on climate finance, and several initiatives to support African states in developing future-proofed, green industries, which can accelerate economic development whilealso safeguarding the continent’s — and the world’s — ecological and climate security.
Afreximbank’s commitment on climate change, which it is promoting at the Summit, is focused on climate adaptation. The trade focused bank is working to co-ordinate and support programmes which mobilise finance for climate-related initiatives, optimise nature-based solutions on the continent, and promote African food security and sustainable water supply, as well as investing in improvements to systems which manage and contain disasters when they occur.
Specific proposals and initiatives led by the Bank include a collaboration with Africa Risk Capacity (ARC) to create a product that protects African economies against food security that arises from climate-induced disasters.
Afreximbank finances the premiums and provides food import finance, while ARC provides the insurance capacity. President Oramah added that with funding at just US$1 billion, this product is grossly underfunded and there is scope for the World Bank and capital-rich economies to step in by providing capital to this fund.
Secondly, a global carbon tax, which many countries have advocated for, could also become a major source of liquidity for the climate insurance programme.
In addition, Afreximbank is increasing its support for its member states in navigating an already precarious climate landscape.
Through investments in the continent’s infrastructure to lay the groundwork for a low-carbon transition, as well as advocacy for Africa’s specific energy needs, it is rallying support for the development of African natural gas and energy reserves, which can in turn, accelerate the realisation of Africa’s renewable energy potential.
The participation of Afreximbank at the Summit follows the Banks’ focused involvement at COP27 in Sharm el-Sheikh in 2022 as well as the signing of a US$3 billion Country Programme between Afreximbank and the Government of Kenya on May 3, 2023. As part of the programme, the Government of Kenya was the first country to access Afreximbank’s recently introduced Climate Change Adaptation Facility.
Commenting on the Bank’s participation in the Africa Climate Summit, President Oramah said:
“I am pleased that Afreximbank’s significant influence and expertise will contribute to the essential discussions taking place at the Africa Climate Summit here in Nairobi this week. Afreximbank has made real and vital contributions to this continent’s climate resilience, as well as the ability of its economies to establish the groundwork for sustainable and inclusive growth.
“From financing solar power plants to helping devise Africa’s entry into global carbon markets and supporting the establishment of an African Energy Bank to guarantee continental energy security and sustainability, Afreximbank has played a pivotal role in Africa’s ongoing efforts to protect itself from existing climate challenges and prevent the occurrence of new ones.
“Afreximbank will continue to represent the interests and concerns of its African member states in this most vital of contemporary discussions.”
The Africa Climate Summit began on September 4 and ended on September 6.
