The African Development Bank (AfDB) has initiated a roundtable to discuss processes that could lead to the launch of a program of works to promote private sector finance and investment opportunities in the energy sector in West Africa.
In conjunction with the UN Convention on Climate Change (UNFCCC), and the West African Development Bank (BOAD), the roundtable ‘ECOWAS Green Investment Round Table’ was recently hosted by the AfDB at its headquarters in Abidjan, Cote d’Ivoire.
AfDB disclosed this in a statement that was obtained by OGN. It explained the meeting sought for ways to catalyze green investments to meet the region’s objectives and targets in line with the Paris Agreement and Sustainable Development Goals (SDGs).
According to it, the roundtable was also initiated to share ideas and experiences in green investment finance in West Africa, as well as, stimulate other financial institutions and banks to engage in transition efforts towards green economy for the region’s countries.
Discussions at the meeting, the statement noted were mainly centred around topics such as green climate and sustainable development investment potential in ECOWAS region; institutional framework; policies; challenges and opportunities, as well as options for enhancing green investment and development of access to regional and international capital markets.
AfDB’s Vice-President, Amadou Hotts, was quoted to have stressed at the meeting the need for stakeholders to adopt new models of financing to achieve climate-compatible development.
Hotts said already about $700 billion out of the $1.5 trillion needed annually to achieve climate-compatible development has been initiated, leaving a funding gap of $800 billion.
“The challenge of achieving climate-compatible development requires USD 1.5 trillion per annum. USD 700 billion is already flowing annually, leaving a climate investment gap of USD 800 billion p.a. Financing these investments requires new models where public finance is a vehicle to ‘crowd-in’ private sector finance,” he said.
This, he added involves reducing risk of green investments; increasing their investment grade; and attracting institutional investors.
He further stated: “AfDB is working on different approaches such as the Co-gurantee platform for renewable energy projects that we can work jointly with BOAD and GuarantCo to support renewable energy projects that require private finance.”
Similarly, the statement noted that AfDB’s Director for Transformative Energy Partnerships, Astrid Manroth, presented the AfDB co-guarantee facility at the meeting, in addition to presentations made by BOAD Green Bonds Initiative and Renewable and efficient Energy Fund (REEF) as a component of global climate change funding mechanism.
It stated that the presentations were part of the de-risking instruments aimed at fostering green investment in Africa.
AfDB Co-guarantee platform can mobilize financial resources
Similarly, the statement explained that participants at the meeting recognized that innovative instruments such as green debt; bonds; and de-risking financial instruments such as the AfDB Co-guarantee platform; the BOAD Green Bond programme and the FONSIS Renewable and Efficient Energy Fund, amongst others can play a major role in the mobilization of financial resources.
They thus stressed the need to develop commonly agreed standards for green bond to enable countries and financial institutions in the region seek low-carbon and resilient opportunities.
ECOWAS platform on finance for climate established
In addition, the statement noted that a task force was put in place at the meeting to facilitate the formation of ECOWAS platform on finance for climate.
The platform will manage and disseminate knowledge on climate finance; create advocacy; mobilize investment; and coordinate climate investment efforts and activities. It will also consider ways to enhance the functions of ECREEE platform, but will be launched at the COP 23, scheduled for November 2017 in Germany.