Canada, AfDB Fund approves $36.3m for climate adaptation

Daba Finance/Canada, AfDB Climate Fund approves $36.3m for climate adaptation

AFRICAN STOCKS AND FINANCEDecember 3, 2023 at 4:38 PM UTC

The Canada–African Development Bank Climate Fund (CACF), established to support gender-affirmative climate change projects in Africa, has granted approval for $36.3 million in concessional loans to two private sector operations aimed at advancing climate adaptation on the continent.

Of this amount, $18.3 million has been earmarked for the rehabilitation and expansion of the Port Autonome de Cotonou in Benin. The funding will support the implementation of climate-proofing measures and best practices in port operations to address the risks associated with climate change, including temperature and sea level rises, and droughts. Importantly, the project is expected to generate employment opportunities for women. Notably, this concessional loan from CACF supplements a EUR 55 million loan from the African Development Bank, approved in July 2023.

The remaining $18 million will be allocated to support the construction of three seawater desalination plants under the Green Investment Program of the OCP Group in Morocco. The project aims to produce and distribute 105 million cubic meters of potable water, benefiting around 1.5 million people in the cities and surrounding areas of Safi and El Jadida, situated on the Atlantic coast of Morocco.

Key Takeaways

Between 2019 and 2020, Africa received an annual average of $29.5 billion in climate finance, with $11.4 billion (39 percent) allocated to adaptation investments. Looking ahead, the continent's adaptation finance needs for 2020-2030 are estimated at nearly $580 billion, creating a potential gap of $453 billion if funding doesn't significantly increase. The primary sources of adaptation finance are multilateral development institutions, African governments, and bilateral agencies. The private sector contributes a small fraction, with almost 90% of this coming from institutional investors such as foundations, insurance companies, asset management firms, pension funds, and endowments. More than half of the adaptation finance to Africa comes in the form of loans. To boost adaptation financing, it's crucial to view it not as a sunk cost to mitigate disaster impacts but as an investment in enhancing the resilience of communities and nations. Mainstreaming adaptation into economic sectors and selecting investments with high economic benefit-to-cost ratios can be key strategies.

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Climate Adaptation

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