In just over a month, African Development Bank Group governors will come together in Egypt to find ways to mobilize the robust private investment Africa needs to meet its urgent climate change adaptation and mitigation goals.
During the African Development Bank Group’s 2023 Annual Meetings in Sharm El-Sheikh, the bank group’s governors, executive directors, and African leaders and development partners will discuss successful strategies to galvanize more resources. These include those from within their own countries as well as investment opportunities in renewable energy and sustainable agriculture. Some 13 African heads of state and government are expected to attend the meetings.
The theme of this year’s meetings—Mobilizing Private Sector Financing for Climate and Green Growth in Africa—reflects the growing urgency expressed by Africa’s leaders for a step change in efforts to limit temperature rise to 1.5 °C above pre-industrial levels by 2100. This is seen as critical to protecting the world’s most vulnerable countries, many of which are in Africa.
If current trends in climate finance flows into Africa continue, the continent faces an annual shortfall that could exceed $127 billion by 2030. Africa could lose as much as 12% of GDP by 2100. In comparison, projected losses for the United States and other industrialized countries represent less than 1% of GDP.
The 2023 Annual Meetings follow on the heels of the 27th global climate summit (COP27) in in Sharm El-Sheikh in November 2022. At COP27, the African Development Bank amplified Africa’s voice in calling for global support for a just energy transition, fulfilment of climate finance pledges, and the need to compensate vulnerable countries for losses and damages caused by climate impacts.
The Annual Meetings will represent a decisive step in attracting more private sector investment into Africa’s clean energy sector. Climate funding by the private sector accounted for 49% (or $310 billion) of the total value of climate finance reached in 2020. In contrast, out of $29.5 billion of climate finance flows in Africa in 2020, 80% of climate investment financing was mobilized from public international actors while private sector funding represented only 14%.
More financing will also be needed to implement climate adaptation measures. These include adoption of climate-smart agriculture and the construction of such infrastructure as roads and bridges, which meets standards of climate resilience.
The aftermath of the Covid-19 pandemic and rising global inflation have combined to constrain the fiscal space of African governments. Furthermore, they have exacerbated an increase in private funding.
The African Development Bank Group’s Annual Meetings also include statutory meetings as well as knowledge events or workshops relevant to the theme of the meetings.
Bank Group governors will also hold a high-level dialogue with African Development Bank Group President Akinwumi Adesina and his senior management team.
The dialogue will focus on the ongoing transformation of international financial architecture and how this is likely to affect the vital role of multilateral development institutions, such as the African Development Bank, in lending and assistance to developing countries.
The African Development Bank has been spearheading major initiatives to tackle financial and economic challenges facing African economies. It has been advocating the channelling of Special Drawing Rights (SDRs) through multilateral development banks. As the only AAA-rated financial institution in Africa and a prescribed holder of SDRs by the IMF, the African Development Bank could leverage SDRs three to four times and deliver more long-term and affordable financing to meet the development needs of African countries.
Hassan Abdallah, Governor of the Central Bank of Egypt and current chair of the Board of Governors of the African Development Bank, said the meetings will enable member countries to contribute to the bank’s mandate and its High-5 operational priorities. “For Egypt, it will be an excellent opportunity to collaborate and contribute to the prosperity of the continent, including the climate agenda and mobilizing more resources in Africa,” Abdallah said.
The 2023 Annual Meetings will also feature the launch of the bank’s flagship publication – the 2023 African Economic Outlook Report – which has the same theme as the meetings.
During a recent visit to the country to assess preparations for the Annual Meetings, Adesina told bank group shareholders how he has been impressed by the organisation of COP27 in Sharm El Sheikh. “It was Egypt at its best. Extremely well-organized, fantastic facilities, a world class job. It made us very proud,” he said.
The theme of the 2023 meetings is also linked to last year’s Annual Meetings’ theme, Achieving Climate Resilience and a Just Energy Transition for Africa.
The statutory annual meetings are the African Development Bank Group’s most important event of the calendar year, attracting around 3,000 participants. The 58th Annual Meetings of the Board of Governors of the African Development Bank and the 49th Meetings of the Board of Governors of the African Development Fund will take place in the Sharm El-Sheikh International Conference Centre.
Visit the 2023 Annual Meetings website: https://am.afdb.org/