Uganda, Angola and Cameroon receive €500,000 green bond

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.