Africa urged to develop bankable projects to unlock climate finance

Source: Africa urged to develop bankable projects to unlock climate finance | Herald (Opinion)

Sifelani Tsiko Agric, Environment & Innovations Editor
The Green Climate Financing training workshop which was hosted by Zimbabwe ended on a high note, with experts calling on African countries to develop bankable projects to unlock climate finance for climate compatible development.

Zimbabwe, in partnership with the Common Market for Eastern and Southern Africa (COMESA), the African Union Commission (AUC) and the United Nations Development Programme (UNDP)’s Regional Service Centre for Africa hosted recently a Green Climate Financing workshop for member states.

The training largely sought to strengthen African Union (AU) member states’ capacities to access, manage and deliver national and international climate finance more effectively in support of their Nationally Determined Contributions (NDC) implementation.

In addition, the workshop sought to raise awareness on the benefits of private sector engagement in all climate actions.

The workshop attracted 75 participants from at least 15 African countries who received training on Nationally Determined Contributions (NDCs) target indicators and Green Climate Financing.

Experts from the Green Climate Fund (GCF), the Global Environment Facility (GEF) and the United Nations Framework Convention on Climate Change (UNFCCC) also attended together with representatives from Regional Economic Communities (RECs), African Development Bank (AfDB), the Development Bank of Southern Africa (DBSA), the Commonwealth Secretariat (COMSEC) and the Infrastructure Development Bank of Zimbabwe.

NDCs are country commitments to mitigate climate change which should be achieved by 2030 under the Paris Agreement.

The agreement makes provisions to track collective progress in making these mitigation contributions through the Transparency Framework, Compliance Framework and the Global Stock Take which starts from 2023 and every 5 years thereafter.

The Paris Agreement further provides for financial flows to developing countries to support their mitigation and adaptation actions

There is a massive demand for climate-related finance in Africa to help mitigate against the impact of climate on the poor on the continent.

Funds are available, but most African countries are failing to tap on the funds mainly because many of the projects are not bankable.

In addition, they cannot get off the ground because of poor of lack of expertise to develop proposals and coordinate the mobilisation of resources by most African countries.

Bankability refers to the ability to obtain project finance.

“If a project is deemed neither bankable nor investible, it means banks will not lend and investors will not put in the money, as they cannot get back sufficient returns within a reasonable timeframe, or the risks are just too high,” noted one Harare-based economist.

In view of these gaps, Zimbabwe and its partners organised the Green Climate Finance workshop to strengthen the capacity of AU members to mobilise resources, sharpen proposal writing skills, strengthen engagement with the private sector as well as cooperation among the countries.

“The Green Climate Finance workshop was a huge success,” said Kudzai Ndidzano, a principal climate change officer in Climate Change Management Department under the Ministry of Lands, Agriculture, Water, Climate and Rural Resettlement.

“Participants appreciated the trainings as it enhanced their capacities to mobilise the necessary funding for NDC mitigation contribution.

“For example, Zimbabwe would need to invest in renewable energy, energy efficiency and climate-smart agriculture. It empowered many of the participants in terms of unlocking green climate finance.”

Ndidzano said most participants were exposed to other financing mechanisms for climate change in addition to the Green Climate Fund (GCF) and the Global Environment Fund (GEF) as well as the African Development Bank’s Africa Climate Change Fund and Green Sovereign Bonds issued in countries like Nigeria.

“The ability to unlock such financing facilities will enhance the implementation of identified mitigation and adaptation actions as guided by the National Climate Policy and the National Climate Change Response Strategy,” he said.

Key recommendations that were made at the Harare training included:

Need to build national capacities to develop bankable projects

Engage in bilateral and multi-lateral financing partners

Need for regional initiatives to tackle climate change

Integration of climate change issues in national and sectoral development plans

Mainstream/integrate climate change in national, sub-national and sectoral budgets

Importance of private sector and fund managers engagement in climate action

During the workshop, technical experts presented an overview of green climate finance, NDC financing and the role of the private sector in climate financing.

Skills were also imparted on how to access finance for climate action, with a focus on identifying good practices derived from national and international experience.

The workshop also tackled some of the complexities which include challenges associated with making bankable adaptation project proposals, cumbersome application processes and procedures, demanding fiduciary requirements, and limited information about existing resources.

“The continent’s low adaptive capacity makes it more vulnerable to the impacts of climate change. Filling this gap requires support in the areas of technology, capacity development, skills and finance,” said Dr Mclay Kanyangarara, the COMESA climate change advisor.

“There is not enough knowledge about what constitutes climate and green finance, and options for investments in climate change-related portfolios and green sectors . . . in addition there is also need to increase awareness on the benefits of private sector engagement in climate actions,” added Harsen Nyambe Nyambe, head of environment, climate change, water and land management at the AUC.

Zimbabwe has made great strides in addressing climate change-related issues through the establishment of the Climate Change Management Department in 2013, development of the National Climate Change Response Strategy in 2014 and the implementation of climate change mitigation and adaptation projects across the country.

The country ratified the United Nations Framework Convention on Climate Change in 1992, committed to deal with climate change based on the principles of the convention, including protecting the climate system for the benefit of present and future generations on the basis of equity and common, but differentiated responsibilities and respective capabilities in light of national circumstances.

Zimbabwe and most other countries are getting more vulnerable to climatic changes and climatologists predict sectoral impacts affecting various sectors from environment, agriculture and food security, health, water resources, economic activities, human migration and physical infrastructure.

The countries are particularly vulnerable to climate change because of high dependence on rain-fed agriculture.

The damaging effects of climate change are now playing out, pushing the majority of the poor into extreme poverty.

This year, Tropical Cyclone Idai brought heavy rainfall and strong winds to Malawi, Mozambique and Zimbabwe between March 5 and 19, 2019, causing severe flooding which led to loss of lives, destruction of infrastructure, disruption of livelihoods and destruction of crops.

It is estimated that close to 780 000ha of croplands in the three countries were destroyed by the cyclone, with the majority of this area being in Mozambique.

Dams and wells were also damaged, and livestock were washed away.

The Southern African Development Community (SADC) region recorded the lowest rainfall in nearly four decades in the 2018-2019 cropping season, sparking fears of increased food insecurity and water shortages in the region

All this flagged a set of climate hazards that were now hitting Zimbabwe and most other African countries.

These are marked out by poor and erratic seasonal rainfall, mid-season dry spells and early cessation of rain, coupled with devastating cyclones.

Most African countries are now working fiercely to address climate change and access to climate finance despite facing numerous constraints.

They are supporting low carbon and climate-resilient development measures through domestic financing by national budget allocations, the establishment of national climate funds and partnerships with local private sector, civil society and local authorities.

Many African countries too, are also looking to improve access to international climate finance sources such as the Green Climate Fund which has allocated half of its USD $4.6 billion global portfolio to African climate projects.