KAMPALA, Uganda
The Nordic Development Fund (NDF) has announced its contribution of €500,000 (about Shs2 billion) to Uganda, Angola and Cameroon to address climate financing gaps in Africa.
Under the Green and Resilience
Debt Platform, the funds will be used to finance climate friendly projects.
Officials from the Nordic
Development Fund say the new partnership will address the barriers many African
countries face in accessing green borrowing markets, by unlocking up to $2
billion in green debt capital markets, resulting in increased resilience of
countries to the impacts of climate change.
Ms Karin Isaksson, the
managing director of NDF, said Africa, especially sub-Saharan Africa, is
already heavily affected by climate change and climate financing gaps need to
be urgently filled.
She said international
development finance institutions and organisations play a crucial role in
filling the green financing gaps, supporting the issuance and investment in
green bonds in least developed countries (LDCs).
“This means providing
technical assistance and acting as cornerstone or junior investors in sovereign
as well as corporate green bonds,” she said.
Ms Isaksson said the European
Investment Bank together with Green Climate Fund will finance the Green and Resilience
Debt Platform (GRDP) project preparation work in the other four target
countries, including Côte d’Ivoire, Namibia, Rwanda and Senegal.
“NDF is committed to
supporting sub-Saharan Africa in addressing climate change, and our aim is to
allocate 60 percent of our financing to the region. We welcome the Green and
Resilience Debt platform as a new tool to unlock climate financing at scale,”
she said.
Ms Isaksson said a combination
of support to investment readiness, financial de-risking together with technical
assistance has the potential to engage the private sector in providing
climate-resilient solutions critical for the development of local and regional
green debt ecosystems.
“We will continue to work with
our partners to find the best synergies in this shared challenge,” she further
stated.
Mr Haoliang Xu, the UN
assistant secretary general and the director of UNDP Bureau for Policy and
Programme Support, said the GRDP addresses a fundamental gap in access to green
debt capital markets for building climate resilience.
“Investments in clean energy,
water, food security, and climate resilient infrastructure will have a
multiplier effect in creating green jobs and promoting economic growth,” he
said.
Ms Ahunna Eziakonwa, the UN
assistant secretary general and director of UNDP's Regional Bureau for Africa,
said Africa's rising economies, bold development ambitions, and growing
population means that its energy use will drastically increase in the coming
decades.
"At a time when countries
in Africa are facing mounting challenges to finance their development, this
partnership will support their efforts in leveraging the potential of green
bonds and unlocking climate finance as a contribution to transitioning to clean
energy and creating climate resilience," she said.
Green bonds enable
capital-raising and investment for new and existing projects with environmental
benefits.
The Green Bond principles seek
to support issuers in financing environmentally-sound and sustainable projects
that foster a net zero emissions economy and protect the environment.
Data from the World Bank shows
that green bonds keep showing positive potential to address the climate
financing gaps that are needed to tackle climate change globally.
It further states that of all
globally issued bonds in 2021, only 5.8 percent are green bonds, and Africa
accounted for only 0.077 percent of issuances.
To boost the use of green
bonds, NDF, together with UNDP, United Nations Capital Development Fund
(UNCDF), the European Investment Bank (EIB), Green Climate Fund (GCF) and the
European Union’s Global Green Bond Initiative (GGBI) are collaborating with
African countries to design and establish a Green and Resilience Debt Platform
for Africa and LDCs.
The platform will provide a
combination of investment readiness and financial de-risking support to
participating countries and create an enabling investment environment.
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