As climate leaders and stakeholders gathered in Kenya’s capital city of Nairobi last week for the Africa Climate Week, one of the main problems voiced was the lack of climate finance on the continent.

Africa needs around $250 billion a year to help countries move to greener technologies and adapt to the effects of climate changes, yet funding in 2020 fell well short of the mark at just $29.5 billion, according to a report by the Climate Policy Initiative.

This is despite repeated pledges by the developed world to provide Africa with the resources it needs to fight climate change, as a continent that contributes only around 4 percent of global carbon emissions.

During the climate week, African leaders adopted the Nairobi Declaration which called for the introduction of a global carbon tax on major polluters as a way to produce climate finance.

“We call for a comprehensive and systemic response to the incipient debt crisis outside default frameworks to create the fiscal space that all developing countries need to finance development and climate action,” the Declaration said.

In addition, Africa leaders also sought to present Africa as a solution to climate change rather than its usual portrayal as a region that only suffers the devastating effect of global warming.

“The Nairobi Declaration adopted in Kenya on September 6th is concrete evidence that Africa, a continent which is so often viewed as a bystander in global climate initiatives, will take a leading role fighting climate change by transforming itself into a cost-competitive green energy hub,” said Audrey-Cynthia Yamadjako, Coordinator of the African Green Bank Initiative at the African Development Bank.

“Our renewable energy potential is both immense and untapped, with the capacity to provide 50 times the global anticipated electricity demand from renewable sources by 2040. However, climate finance will be key to unlocking Africa’s colossal green energy capacity and that is why we, at the African Development Bank (AfDB), are at the forefront of innovative projects – like the Green Bank Initiative – to help African governments and banks attract global climate finance which is yet to materialise despite repeated promises from the international community”.

Indeed, the AfDB’s side panel entitled ‘Kenya Green Investment Bank: Instrumental for the Kenyan Climate Resilient and Energy Transition Pathway’ set out how the introduction of Green Banks across Africa could provide a workable solution to the lack of climate finance.

The event was moderated by Gareth Phillips, Manager, Climate and Environmental Finance, AfDB with a keynote address from Kevin Kariuki, Vice President for Power, Energy, Climate and Green Growth.

The panellists were Maryse Lokossou, Managing Director of CDC Benin, Luis Tineo, Acting CEO, Climate Investment Funds and Gioconda Ortega Alarie, Project Manager, Climate Action Africa.

The AfDB will equip thousands of institutions and governments with the technical capacity and capital needed to set up Green Finance Facilities which can attract global climate investment.

The problem, as it stands, is not only that there is a lack of finance but also that most banks and public sector entities in Africa are not prepared to receive or attract investment.

The Green Bank Initiative, which was launched at COP27, solves that problem, allowing financial institutions across Africa to tap into much-need capital that can be invested in transformative green projects.

In May, the Bank announced the creation of the first Green Banks in Africa, through a partnership with financial institutions, La Caisse des Dépôts et Consignations du Bénin (CDC Benin) and the Ivorian National Investment Bank (BNI).

Speaking at the event, Kevin Kariuki, Vice President for Power, Energy, Climate and Green Growth, said: “In championing climate and environmental action, the AfDB has identified the Green Bank model as representing a broad opportunity for Africa to turn the $250bn climate financing gap per year into an investment opportunity. Local public or private banks have the capacity to bridge the national climate and environmental finance gap without burdening sovereign debt by facilitating access to international and domestic financial resources to further green projects”.

Maryse Lokossou, Managing Director of CDC Benin, gave a clear picture that the climate facility put in place by the Green Bank Initiative following the partnership in May had led to numerous advantages.

She said: “The introduction of the Green Finance Facility will help galvanize resources for the project and programmes linked to Benin’s strategy to combat climate change. The facility also came with aid and technical expertise to help Benin develop its climate projects. This includes the development and conception of possible climate projects and also the reinforcement of local management capacity to help manage these projects”.

As African leaders look to yet again lobby the developed world to make good on finance pledges at COP28 in Dubai, the Green Bank Initiative has emerged as a key vehicle to help African banks and sovereigns attract climate finance.