African Development Bank Leads on Climate Finance, Says UN Report

Dike Onwuamaeze

The African Development Bank (AfDB) has been distinguished as the only large development bank that spent more on climate finance to enable communities to adjust to the inevitability of climate change.

The AfDB crossed the threshold of committing 32 per cent of its facilities to climate financing and edging toward achieving 40 per cent, its peers like the European Investment Bank is still at 11 per cent.

This was affirmed by the United Nations Climate Panel Report that was put together by the Intergovernmental Panel on Climate Change (IPCC), which is titled “Climate Change 2021: The Physical Science Basis,” which addressed the most up-to-date physical understanding of the climate system and climate change, bringing together the latest advances in climate science, and combining multiple lines of evidence from paleoclimate, observations, process understanding, and global and regional climate simulations.

The report stated unequivocal that “human influence has warmed the atmosphere, ocean and land” and triggered “widespread and rapid changes in the atmosphere, ocean, cryosphere and biosphere that have occurred.”

The AfDB doubled its climate finance commitments for the period 2020-2025, projecting to commit $25 billion on climate finance.

The President of the AfDB Group, Dr. Akinwumi Adesina, said that the bank is on course to achieve its target of allocating 40 per cent of its funding to climate finance by 2020, a year ahead. The Bank’s commitment on the target, the highest among all multilateral development banks, has progressed steadily from nine per cent in 2016 to 28 per cent in 2017 and 32 per cent in 2018.

“The required level of financing is only feasible with the direct involvement of the entire financial sector,” said Adesina. “Consequently, the Bank launched the African Financial Alliance for Climate Change (AFAC) to link all stock exchanges, pension and sovereign wealth funds, central Banks and other financial institutions of Africa to mobilize and incentivise the shift of their portfolios towards low carbon and climate resilient investments.”

The IPCC report said that the European Investment Bank spent 11 per cent of its climate finance for poorer countries on adaptation that year.

It said: “Climate change is already affecting every inhabited region across the globe with human influence contributing to many observed changes in weather and climate extremes.”

The report warned societies of the need to be ready for heat waves by creating public health infrastructure to cope with those who become ill and urged regions to rethink urban planning and development to steer communities away from high-risk zones, such as wildfire spots.