Blended Finance Tools Can Offset Risks, Incentivize Climate Investment in Africa, Deputy-Secretary General Tells Regional Forum
Following is the text of UN Deputy Secretary-General Amina Mohammed’s video message to the African Regional Forum on Climate Initiatives to Finance Climate Action and the Sustainable Development Goals, in Addis Ababa today:
Your excellencies, ladies and gentlemen, COP27 [twenty-seventh Conference of the Parties to the United Nations Framework Convention on Climate Change], to be held on the African continent, must be a meeting of implementation. It must deliver concrete results for developing countries in Africa and elsewhere to mitigate the climate crisis and achieve the Sustainable Development Goals. That is why this regional round table and others being held in the coming weeks are so important. Today, I would like to highlight three priorities for progress on some of the climate initiatives presented during this forum.
First, we must ensure a just energy transition for Africa. We need to recognize Africa’s different starting point on its path to decarbonization. Currently, only 2 per cent of clean energy investments flow to Africa. Yet, 600 million persons living on the continent still lack access to basic electricity. Achieving universal access to energy must be built on massive investment in renewables, unlocking millions of jobs. This will require support from donors, multilateral development banks and private financiers. Each nation’s transition will be based on its own unique national circumstances.
Second, we must make good on our climate commitments. Developed countries must get serious and concrete on how they will meet their commitment to delivering $100 billion annually for climate adaptation and mitigation in developing countries, and they should double adaptation finance by 2025. Specifics on targets and timelines will be the litmus test for the $100 billion pledge as the cornerstone of trust in the multilateral process. Multilateral development banks must play their part. They must overhaul their models and increase their risk appetite to mobilize trillions from the private sector.
Third, the private sector will play a key role in determining whether we succeed or fail. The Economic Commission for Africa (ECA) estimates that investment in African green sectors brings a return as high as 420 per cent in value addition and as high as 250 per cent in job creation. In these times of turbulence, blended finance instruments can offset investment risks and incentivize climate investment in Africa. Furthermore, debt-for-climate swaps can help alleviate Africa’s debt burden while contributing to environmental sustainability. Successful African-led initiatives, such as the Africa Risk Capacity need support and additional investments.
In closing, I want to highlight the importance of acting with urgency and scale. Africa’s climate vulnerability is also an investment opportunity. This is the time to commit and demonstrate the power of concerted action. I thank you.