African Development Bank boosts innovation to scale up climate adaptation | African Development Bank

Innovative approaches and solutions will be critical to scaling up adaptation efforts on the African continent. This includes the African Development Bank supported Adaptation Benefit Mechanism and the Africa Adaptation Acceleration Program. The latter is a joint initiative of the Bank and the Global Center on Adaptation.

This claim was made clear in a May 26 panel discussion hosted by the African Development Bank at its 2023 annual meetings in Sharm El Sheik, Egypt. The panel of experts stressed Africa’s urgent need to take action to boost climate adaptation, but also highlighted a number of obstacles, including the difficulty of measuring and monetizing adaptation efforts.

Speakers included representatives from the African Development Bank, development partners and development beneficiaries.

Kevin Kariuki, vice president for energy, energy, climate and green growth at the African Development Bank, opened the discussion, saying that climate investments favored climate mitigation over adaptation, but that it was not to Africa’s benefit.

Kariuki: “Many adaptation projects are small-scale and context-specific. The micro, small and medium enterprises that would carry out these projects do not have access to the international private funds because they have no collateral or expertise to apply.”

Climate adaptation projects generally generate little cash flow, although they generate public goods that are difficult to monetise. “The donor community is looking for adaptation metrics to increase efficiency and improve support, but unfortunately the metrics for adaptation do not exist today,” added Kariuki.

Under the Adaptation Benefit Mechanism, development partners, consumers, funds and philanthropists enter into purchase agreements for Certified Adaptation Benefits. Developers will use these as collateral to raise debt, equity and in-kind contributions from the private sector.

Adaptation Benefit Mechanism projects will also include an approved methodology that defines expected adaptation benefits and allows certification of outcomes leading to the achievement of desired impacts. The program was launched in a pilot phase in 2019 and two pilot projects are under development: one for climate-resilient cocoa in Ivory Coast and another for rapid flood control dam construction in Lagos, Nigeria.

African Development Bank manager Gareth Phillips stressed that the Bank has a number of live adaptation initiatives ready to receive contributions, saying that the Bank was in the process of raising as much as $50 million in funding to to capitalize on a new fund tentatively dubbed the “African Adaptation”. Benefit Fund”, which is expected to be launched at the next global climate summit (COP28) in November. The money will be used to purchase Certified Adaptation Benefits to kick-start the Adaptation Benefit Mechanism and will also provide technical assistance and support the operation of the Mechanism’s Executive Committee and the establishment of a Secretariat.

Charles Nhemachena, acting regional director of the Global Center on Adaptation for Africa, said the Africa Adaptation Acceleration Program is working to mobilize $25 billion over five years to accelerate and scale climate adaptation efforts across the African continent. He said that over the past two years the program had “influenced more than $5 billion in downstream investment supported through the upstream facility. An example is the African Development Bank’s Banjul port project in the Gambia, for which the upstream facility conducts climate risk testing had performed.

Development partners and beneficiaries of African Development Bank initiatives to promote climate adaptation included Daouda Ndiaye, climate and environment manager at the Islamic Development Bank and member of the Executive Committee of the Adaptation Benefit Mechanism; Phil Stevens, UK Deputy Governor of the African Development Bank Board; Adama Kone, Executive Director of the African Development Bank for Ivory Coast; and Margaret Kuhlow, a United States Deputy Assistant Secretary of the Treasury.

Stevens said the African Development Fund’s new Climate Action Window – the bank’s concessional loan – has created an opportunity for private investors to channel money for climate adaptation.

At the annual meetings of the African Development Bank Group, the United Kingdom announced the launch of two projects under the “Room to Run” guarantee program, a $2 billion guarantee to the bank. The guarantee will enable the bank to provide an additional $2 billion in climate finance to Africa by 2027, with a 50-50 split between climate adaptation and mitigation.

Kuhlow said people usually think of energy when they hear the word “climate,” but that in many parts of the world, climate means water: too much or too little. She said the United States is committed to the adaptation agenda, with its efforts in Africa through the African Development Bank through the African Development Fund.

Kuhlow explained that President Joe Biden’s administration launched the President’s Emergency Plan for Adaptation and Resilience (PREPARE). She said the goal was to provide relief to 500 million of the world’s most vulnerable people. She added that the Biden administration had also committed to supporting the Adaptation Benefit Mechanism in its 2023/2024 budget.

The African Development Bank is a pioneer among global multilateral development banks in terms of the share of its climate finance allocated to climate adaptation. Financing for climate adaptation increased from 49% in 2018 to 55% in 2019 and 63% in 2020.

The 2023 Annual Meetings of the Bank will take place from 22-26 May.