Nigeria, other AfDB regional shareholders to benefit from CA$133 million Canada climate fund

…Fund to be administered by AfDB

…To finance climate change projects in AfDB’s regional member countries

Ben Eguzozie, in Port Harcourt

Nigeria, largest shareholder of African Development Bank (AfDB), with portfolio of approximately US$6 billion and 9 per cent voting power, is to along with other regional shareholders, benefit from a Canada AfDB $133 million gender lens Climate Fund for Africa.

Known as Canada African Development Bank Climate Fund (CACF),the concessional facility resources will be deployed in innovative low-carbon technologies, renewable energy, climate-smart agriculture, sustainable forestry, water management, and climate-resilience projects in AfDB regional member countries. 

The Government of Canada and the AfDB signed an agreement formalizing the CACF, a transformative special fund aimed at providing concessional loans to climate change-related projects with a strong gender-responsive component.

Africa is losing between $7 billion and $15 billion annually from the vagaries of climate change. The International Monetary Fund (IMF) said the loss could rise to $50 billion by 2040.

The AfDB has committed to providing $25 billion in climate financing by 2025.

The fund will be capitalized through a combination of a CA$122.9 million (US$104.8 million) repayable contribution, aimed at providing concessional loans for both sovereign and non-sovereign operations plus a CA$10 million grant contribution for complementary technical assistance. The African Development Bank will administer the fund.

Canada is one of the AfDB Group’s key non-regional members. The largest African Development Fund (ADF) shareholder is the United Kingdom, with approximately 14 per cent of the total working shares, followed by the United States with approximately 6.5 per cent of the total voting shares, followed by Japan with approximately 5.4 percent.

Canada has participated in all AfDB Group’s capital increases. Its 7^th general capital increase, the replenishments of the African Development Fund, the 15^th replenishment of the Fund (ADF-15), with a 7.5% increase in AfDB units of account (UA) terms. It has also contributed to numerous trust funds and initiatives managed by the Bank Group.

Karina Gould, Canada’s minister of international development, speaking at a virtual signing ceremony to conclude the agreement, on the sidelines of the Canada-Africa Clean Growth symposium, said the investment, with its strong gender footprint, recognized “the critical role that women need to play in climate action, and supports their efforts to mitigate and adapt to the effects of climate change.”

“Climate change is one of the most important challenges of our time…And, although we are all affected by it, we in Canada know that not everyone is affected equally…that means that vulnerable and marginalized people are bearing the brunt of this crisis,” said Gould.

The fund will finance climate change related projects in the African Development Bank’s regional member countries, including those that demonstrate a strong gender equality focus. The empowerment of women and girls will be an objective across all concessional financing of the CACF, aiming at direct, measurable gender equality outcomes.

Akinwumi Adesina, AfDB president said, “in building back Africa, climate resilience is very important… This is why I’m delighted and thrilled with the Canada-African Development Bank Climate Fund that we are launching today.”

He thanked Canada for its “tremendous” support to the Bank in terms of general capital increases, temporary callable capital, and the support the North American giant has given to Africa through the AfDB.

He said the resources were very unique in helping African with adaptation. “First, it is long-term financing. It will provide long-term capital to the private sector, and to the public sector. It also provides it at affordable levels for countries…What I like most about it is that it looks at multi-sectoral use of this financing…all these things are very important to support Africa in climate adaptation and mitigation,” Adesina said. “Canada has always been there for Africa…Canada is a great friend of Africa,” he said.

The AfDB’s financing for climate has increased fourfold from 9 per cent of its total portfolio in 2016, to 36 per cent by 2019; and is on track to achieve a target of 40 per cent of total portfolio by the end of 2021.

The Canada-Africa Clean Growth symposium, co-hosted by Canada, Ethiopia and Senegal, brought together economic and business leaders from the public and private sectors from Canada and sub-Saharan Africa to explore innovative ways to grow their economies, while reducing emissions and building resilience to climate change.

The sessions focused on a blueprint for a green economy, incorporating socioeconomic development, while ensuring sustainable management of natural resources, minimizing waste and pollution, and following climate-resilient and low-carbon development pathways.