Green banks can fill the climate finance gap – MENA Climate Week participants hear – Global

Green banks have a critical role to play in bridging the climate finance gap, participants at an African Development Bank event on the sidelines of Middle East and North Africa Climate Week said.

Organized in partnership with the Islamic Development Bank, An Ecosystem of Green Finance Facilities: A $3 Billion Opportunity for Africa brought together climate finance experts from the two Multilateral Development Banks, the Nordic Development Fund and from Pollination Group, a climate change investment and advisory firm, to share insights on how sustainable investing represents an opportunity for Africa and the MENA region.

Also present was Dr. Rania A. Al-Mashat, Egyptian Minister for International Cooperation, who said: “The establishment of green funds and green financing mechanisms is essential for the financing of green projects in Africa. We need government, MDBs, local financial institutions and stakeholders to work together to drive sustainable initiatives.” Egypt, which will host COP27 in November 2022, should serve as a model for other countries in the region.

The Egyptian government is creating an enabling environment and strategically aligning its policies with the needs of the private sector. Ahead of COP27, Egypt is preparing a guide to help governments, multilateral development banks and the private sector engage in mobilizing climate finance.

Gareth Phillips, Head of Climate and Environmental Finance at the African Development Bank, who moderated the discussion, said: “Green banks or green financial facilities have the potential to increase the ability of African countries to access and mobilize climate finance to support the implementation of their NDCs and national climate and development goals. They design and finance a pipeline of bankable, sustainable local projects by strategically using limited public funds to mobilize much larger private investments.

The African Development Bank has begun preparing for the launch of the African Green Finance Facility (AG3F) next year. AG3F should: provide technical assistance grants to help local governments and financial institutions design green financing mechanisms and develop “Paris-aligned” sustainable and green project pipelines; capitalize green financing facilities; and co-finance project pipelines by providing concessional resources and de-risking mechanisms to enable private investors to participate in green transactions.

Panelists expressed consensus on the need to build local capacity to develop sustainable projects, structure blended finance to improve access to capital, and engage more effectively with the private sector.

“Mainstreaming the green banking model offers a huge opportunity to close the climate and environmental financing gap for Africa. MDBs and international financial institutions have a crucial role to play in empowering local financial institutions to develop a local green pipeline of projects and facilitating their access to the resources they may need to support sustainable and sustainable development and prosperity. in Africa,” said Audrey-Cynthia Yamadjako, Trust Fund Manager and Coordinator of the Green Bank Initiative at the African Development Bank.

The Government of the United Arab Emirates hosted the Middle East and North Africa Climate Week, co-organized by the United Nations Climate Change Secretariat, the United Nations Development Programme, the United Nations Program for the Environment, the World Bank Group and partners based in the MENA region.

The African Development Bank organized four events during the meetings, three of which were with the Islamic Development Bank.

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