Downtown Africa
A recently published African Development Bank (AfDB) study in Africa recommends that development financial institutions and other investors focus on high-impact, high-growth potential start-ups that can drive climate-related innovation. The study was produced in partnership with the Fund for African Private Sector Assistance and launched during AfDB’s virtual webinar.
Based on the study, it has been revealed that climate action offers profitable opportunities for the private sector but will also help protect those investments from climate impacts. Therefore, governments should be encouraged to see the private sector as a critical partner for climate action and create the enabling policy and regulatory environments that enable the swift innovation of the private sector. Indeed, government and development institutions must engage the private sector in efforts to develop the green economy and meet Africa’s commitments under the Nationally Determined Contributions (NDCs) of the Paris Agreement of Climate Change.
Al Hamndou Dorsouma, the Bank’s Acting Director of Climate Change and Green Growth, stated that it “has pledged to mobilize $25 billion towards climate action on the continent by 2025.” He observed that the Nationally Determined Contributions developed by African countries will require “an estimated $3 trillion of investment by 2030, of which at least 75% is expected to come from the private sector, which has a crucial role to play.”
The study also identified opportunities and entry points for private sector participation in NDC implementation in Africa with a focus on five pilot countries including Egypt, Morocco Mozambique, Nigeria, and South Africa. Notably, only five African countries – Burkina Faso, Ghana, Morocco, Niger, and South Africa – have carefully considered the role of the private sector in their NDCs.
To date, AfDB has engaged in several initiatives to support the achievement of national NDCS. Last year, it launched the Private Sector Investment Initiative for African NDCs. This initiative aims to build the capacity of African businesses to mainstream climate change into their business operations and identify opportunities that advance NDC goals. Through the initiative, the Bank provides knowledge products and climate change tools to also support this. The bank has also used the initiative to train SMEs and financial institutions from six different countries on strategies to identify climate risks and opportunities in their businesses and estimate the impact of their business activities on greenhouse gas emissions.
This article was adapted from a press release distributed by APO Group. You can start earning money by becoming our Independent Reporter or Contributor.
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