ADF allocates $13.2 m for Climate Action Window

ADF allocates $13.2 m for Climate Action Window
By Marwa Nassar - -

The African Development Fund (AFD) approved allocating  $13.2 million from its net income for the Climate Action Window (CAW).

This came on the sidelines of the 59th Annual Meetings of the Board of Governors of the African Development Bank Group in Nairobi.

Africa’s massive climate financing needs – currently standing at around $277 billion – can only be met with innovative tools. These tools include guarantee mechanisms, issuance of sustainable hybrid bonds, and the Bank’s Climate Action Window, which seeks to mobilize $4 billion during the current ADF-16 cycle, Kariuki added.

Speaking on Monday 27 May during a special session of donors to the CAW, African Development Bank Vice-President for Vice President for Power, Energy, Climate and Green Growth Kevin Kariuki said the second call would focus on climate mitigation projects aimed at reducing or avoiding greenhouse gas emissions. The goal is to promote approaches that support achieving net-zero emissions.

Kariuki spoke of the effects of climate change across the continent – floods in Kenya and Tanzania earlier this month, cyclone Freddy’s devastating impact in South Africa last year and current droughts in the southern Africa region.

Kariuki also thanked the founding donor countries – Netherlands, Germany, Switzerland and the United Kingdom – for “believing in our dream” on behalf of ADF countries.

The first call for proposals for the CAW saw 359 eligible projects worth $4 billion dollars highlighting the extent of the adaptation needs, Kariuki said. The projects cover all ADF countries through 31 national and 10 multinational projects.

African Development Bank Group Director Anthony Nyong said the projects – “the largest pipeline of adaptation projects on the continent” spanned various sectors, including agriculture, water security, early warning and climate information systems, green finance, and resilient infrastructure.

The Bank has made a commitment to allocate at least 40 percent of its annual investments amounting to $25 billion to climate finance during the period 2020-25 and is on target to meet this if current lending continues. In 2023 it committed $5.85 billion in 2023 as climate finance, Kariuki said. The Bank’s “triple A” of climate finance – availability, access and affordability, would guide the Bank’s efforts.

The ADF opened the CAW to support the climate financing needs of low-income countries with an initial financing of $429 million. The fund is expected to grow to $14 billion.

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