The African Development Bank (AfDB) has initiated the establishment of four green banks in Africa, aiming to mobilize up to $1.5 billion by 2030 for green financing.
The African Green Bank initiative by the African Development Bank (AfDB) seeks to address the insufficient climate finance available at each UN Conference of the Parties (COP) meeting on the climate crisis.
Under the plan, the AfDB is spearheading the green investment facilities in financial institutions in Benin, Ivory Coast, Morocco and Egypt to equip local banks with the technical capacity to attract climate finance from international and domestic investors.
The African Green Bank Initiative, introduced by the multilateral lender, stands as a practical solution to the scarcity of climate finance in the continent. Launched at COP27 in Egypt, the initiative aims to establish numerous green banks across Africa in the coming years.
Each green bank will raise funds for investing in transformative climate projects, putting Africa in a much better position to fight climate change.
Despite being one of the most climate-vulnerable regions in the world, Africa receives just three per cent of global climate finance, making the continent of more than 1.4 billion people extremely vulnerable to extreme weather shocks as climate-resilient and climate-adapted projects cannot be rolled out at the pace required.
Rich countries promised $100 billion a year to help developing nations fight climate change at COP15 in 2009, but funding has been anything but forthcoming. Doubts persist that the situation will change at COP28 in Dubai.
In response to the lack of finance, the African Green Bank Initiative will roll out large numbers of green banks across the continent over the coming years.
Green banks or green investment facilities are blended financial instruments placed in existing financial institutions or created from scratch which have the technical and financial capacity to attract climate finance from international and local investors.