Experts call for debt-free climate financing ahead of COP29
The 29th session of the global climate change negotiations (COP 29) is happening in Baku, Azerbaijan in November.
What you need to know:
- Despite Africa contributing so little towards global greenhouse gas emissions, the continent is receiving money to support climate adaptation and mitigation projects through loans.
- African taxpayers will be forced and are already being forced to pay back with interests, and Kenya is not an exemption.
Just two months ahead of the 29thsession of the global climate change negotiations in Baku, Azerbaijan, policymakers, experts and advocates at the 12thsession of the Conference on Climate Change and Development in Africa (CCDA-XII) have called on negotiators to come up with innovative climate financing solutions that will not exacerbate Africa’s debt burden.
Josefa Correia Sacko, the Commissioner for Agriculture, Rural Development, Blue Economy, and Sustainable Environment (ARBE) at the African Union Commission called on African states to prioritise financing for impactful projects and ensure that carbon markets work in favour of the continent.
"I urge all of us to speak with one collective voice as we prepare for COP 29,” she told the CCDA XII delegation in Abidjan, Côte d'Ivoire, which was held alongside the 2024 African Ministerial Conference on the Environment (AMCEN).
“Our focus must be on mobilising climate finance at scale for Africa, with a clear emphasis on securing grants rather than loans or debt,” said Sacko.
Her sentiments were echoed by Hanan Morsy, the Deputy Executive Secretary and Chief Economist of the UN Economic Commission for Africa (UNECA), who called for innovative financing solutions that do not exacerbate Africa’s debt burden, leveraging the African Continental Free Trade Area (AfCFTA) to channel investments into adaptation efforts.
Despite Africa contributing so little towards global greenhouse gas emissions, the continent is receiving money to support climate adaptation and mitigation projects through loans that African taxpayers will be forced and are already being forced to pay back with interests, and Kenya is not an exemption.
A project known as ‘Building Climate Resilience for Food and Livelihoods in the Horn of Africa’ (BREFOL) is an example of the latest project partly loaned to Kenya, Djibouti, South Sudan, Ethiopia and Somalia in the name of ‘climate finance.’
On 18 July 2024, the Green Climate Fund (GCF) approved Sh43 billion ( USD 335m) for the AfDB to improve the adaptive capacity of communities in the Horn of Africa region at scale through the project.
However, Sh7.7 billion(USD 60.3m) of the finance comes as a loan, which taxpayers will be forced to pay back with interest through the AfDB, should beneficiary countries express interest in partaking of the readily available loan.
Another project is known as the Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM) for the East Africa region, which was approved last year in October and is being implemented by the International Funds for Agricultural Development (IFAD).
Out of the approved USD 200 million (Sh25.6 billion) for the climate adaptation project, USD 45 million (5.8 billion) is a loan that will have to be paid back with interest by taxpayers from Kenya, Uganda, Tanzania and Rwanda, should the countries develop an appetite for the readily available climate finance loan.
On a larger scale, the World Bank is implementing a pure climate mitigation project known as ‘The Sustainable Renewables Risk Mitigation Initiative (SRMI) Facility to the tune of Sh205 billion(USD 1.6) out of which, Sh179 billion will be paid back with interest by taxpayers from seven African countries including Kenya.
The 12-year project, which was designed to help the target countries shift to low-emission sustainable development pathways and increase access to affordable, reliable, sustainable and modern energy, was approved by the GCF on 19 March 2021.
“As Africans, we are totally against all climate finances that come in the form of loans, whether commercial or concessional,” said Peter Odhengo, Climate Finance Policy advisor at Kenya’s National treasury. “Asking that old woman to pay such taxes whenever she buys salt for her grandchildren whose parents were swept away by floods is unacceptable, it is immoral, and a crime against humanity,” he added.
Dr Mithika Mwenda, the Executive Director at Pan African Climate Justice Alliance (PACJA) wondered why African countries were being financed through intermediaries for facilities they will be forced to pay back, instead of availing direct easy access finances for countries.
“Is it not like double paying as you will be required to pay the running cost of the intermediary?” he wondered, noting that there is a need for a total overhaul and reform of global finance architecture.
UN data shows that African countries will need close to USD 3 trillion to fully implement their Nationally Determined Contributions (NDCs) by 2030.
However, according to Morsy, there is a challenge when it comes to mobilising climate adaptation funds, particularly for the developing world.
"Despite the 2009 pledge of USD 100 billion annually (by the developed nations), only a fraction of the estimated USD 1.3 trillion needed to support global climate resilience has been mobilised,” she said noting that the decline in global climate finance for adaptation, rather than the expected doubling by 2025, poses a serious threat to the Sustainable Development Goals (SDGs) and existing resilience investments.
Côte d'Ivoire's Minister of Environment, Jacques Assahoré Konan, underscored the magnitude of the climate crisis, stating, "Combating climate change is the greatest challenge humanity has faced in the last century."
He highlighted the disproportionate impact on Africa, which contributes less than 4 per cent of global greenhouse gas emissions yet bears the brunt of climate-related consequences. "Adaptation to these adverse effects is a major concern for Africa, and securing adequate financing is key," he said.
Antony Nyong, Director of Climate Change and Green Growth at the African Development Bank (AfDB) highlighted the need for recognition and compensation for Africa's significant contributions to global mitigation efforts.
"Our priority must be fostering climate-resilient development while balancing adaptation with climate-informed investments,” said Nyong.
However, he noted that this can only be achieved with adequate financing, technology transfer, and capacity building, under the principle of common but differentiated responsibilities.
