The African Export-Import Bank (“Afreximbank”) recently concluded its participation at COP28 in Dubai, the United Arab Emirates, where the Bank reiterated its commitment to advancing the continent’s climate goals and sustainable development agenda.
Against the backdrop of the official COP28 theme “Transforming climate finance, by delivering on old promises and setting the framework for a new deal on finance; Putting nature, people, lives, and livelihoods at the heart of climate action”, Afreximbank worked to build on the progress made at COP27 in Egypt and the African Climate Summit 2023 in Kenya.
At COP27, Afreximbank spearheaded calls for Africa to assert its needs, challenges, and outlook, and most significantly to drive the continent’s position on a just energy transition and sustainable development. Similarly, at COP28, Afreximbank’s position aligned with the broader agenda of the African Union on Climate Change and Africa’s development as outlined in the Nairobi 2023 declaration during the Africa Climate Summit 2023.
The Bank’s approach also incorporated elements from COP27, addressing the broader issues on financing climate interventions for climate adaptation and mitigation, loss and damage compensation for African states affected by climate-related hazards and potential challenges that African states will face as they try to access the Loss and Damage Fund announced during COP28’s opening session.
Professor Benedict Oramah, President and Chairman, Afreximbank, said, “Amidst the pressing climate challenges faced by Africa, Afreximbank continues to advocate for an inclusive and just energy transition for Africa, in collaboration with the African Union, member states and partners, that will forge a new, green industrialized economy, advance the continent’s climate goals and development through strategic initiatives and expediting of the AfCFTA implementation. This will serve as a catalyst for economic development and a resilient future for Africa.
Led by its Executive Management, Afreximbank made substantial progress in critical areas.
Support the advancement of the goals articulated under the African Leaders Declaration on Climate Change in Nairobi 2023
At COP28, Afreximbank championed a robust pan-African narrative derived from the agreed Nairobi declaration at the inaugural African Climate Summit in Nairobi. Afreximbank supported interventions addressing the multidimensional impacts of climate change on the continent and promoting sustainable development in Africa. In line with the Paris Agreement emission reduction goals, Afreximbank showcased African leaders’ aspirations to reduce emissions while actively contributing to the implementation of innovative solutions designed to address the existing climate finance in the continent. The Bank further advocated for the swift operationalization of the Loss and Damage Fund agreed upon at COP27, designed to provide financial assistance to countries that are most vulnerable and impacted by climate change, especially in Africa.
Fostering and promoting inclusive partnerships for renewable energy and a just energy transition for sustainable development
Aligned with the AU Agenda 2063, Afreximbank’s commitment to financing and supporting renewable energy projects was sounded at COP28. Specific focus was given to interventions seeking to increase capital to support the optimisation of Africa’s vast renewable energy potential and other initiatives buttressing the development of sustainable energy systems that guarantee increased energy access for Africans as an important catalyst for economic development. Indeed, Afreximbank used the COP28 opportunity to underscore the importance of planning renewable energy ventures on the continent to ensure their readiness for investment from private capital.
Afreximbank also urged for increased collaboration by public and private sector actors for a globally inclusive energy transition model. The Bank solidified its commitment to supporting Africa’s just-transition plans, taking into consideration the continent’s development priorities, mitigation of transition costs, timelines, and the criticality of its natural resources in financing development programmes designed to address existential challenges including improved energy access for its people.
Moreover, Afreximbank discussed the opportunity presented by Africa’s great reserves of critical energy transition materials. The Bank highlighted its collaboration with UNECA, alongside other partners, in progressing the DRC-Zambia Battery Value Chain Special Economic Zones, aimed at locally beneficiating the critical minerals necessary for the global energy transition.
Accelerating the Implementation of the AfCFTA for a Greener Africa
At COP28, Afreximbank, among other African institutions, was at the forefront of championing the AfCFTA, showcasing its ability to drive local industry growth and spearhead a continent-wide transition to net-zero emissions. The Bank prioritizes the mobilization of resources to foster collaborative efforts expediting AfCFTA implementation which will promote the localization of regional value chains, critical to reducing Africa’s carbon emissions. Notably, the Bank’s groundbreaking initiative, the AfCFTA Adjustment Fund, aims to address short-term disruptions and ensure retooling and reskilling within the private sector for sustainable development in Africa. At a side event, the Bank and other partners launched the SAFE Initiative, where its representatives made the case for the expansion and acceleration of the continent’s burgeoning EV industrial infrastructure.
Afreximbank engaged in crucial dialogues at COP28 and used the platform to advocate for climate action in Africa – highlighting at all times the AfCFTA’s pivotal role as an instrumental variable in achieving climate goals. Conference delegates heard from Afreximbank’s trade policy experts on the importance of a trade approach coordinated on a continental basis.
Deployment of innovative climate finance solutions
Afreximbank’s commitment to exploring and deploying innovative climate finance solutions was demonstrated at COP28. The Bank highlighted its climate-related initiatives such as the Climate Adaptation Finance Facility, early-stage project preparation facility and risk bearing instruments like guarantees, tailored for the Bank’s member states. Afreximbank aims to deploy initiatives designed to address the challenges inhibiting access to climate finance, and the need for increased private and public sector collaboration in financing of climate interventions across the continent.
The Bank also articulated the urgency of channelling climate finance to Africa and the importance of crowding in private sector capital to climate-relevant projects, communicating to a broader international audience the imperative that, as well as a radical increase in the quantity of financing directed to continental ventures, the structure of finance flows to Africa must be revised to meet the demands of this unprecedented test.
Shaping a well-regulated carbon market for Africa’s future
Afreximbank acknowledges its position as a key player in shaping a well-regulated carbon market in Africa by 2030. With initiatives like the African Carbon Markets Initiative (ACMI), the Bank contributes to transparent and innovative solutions, aligning with COP28’s transformative climate finance theme. Afreximbank is committed to the implementation of Biodiversity Credits in Africa and the diversification of the continent’s participation in carbon credit markets, which could be converted into a critical funding tool to bridge Africa’s Infrastructure Finance Gap.