FEATURE : ENERGY
Long a destination for donor funding from developed nations , African financial institutions are beginning an initiative to create their own energy transition , survival game plan , writes NJ Ayuk from the African Energy Chamber . The creation of the African Energy
Bank is one such initiative taking place in 2024 . based on the latest Organisation for Economic Cooperation and Development data , developed countries provided $ 83.3 billion . 8 % of the total went to lowincome countries and about a quarter to Africa .”
Since then , the OECD has published more up-to-date data . And while it shows encouraging signs , it also shows total financing has continued to miss the mark after the deadline . In 2021 , total climate finance provided and mobilised by developed countries for developing countries amounted to US $ 89.6 billion , showing a significant 7.6 % increase over the previous year .
From an African perspective , one of the most important things to come out of COP15 , the 2009 United Nations Climate Change Conference in Copenhagen , was the formal recognition of the fact that lower-income countries were not in a position to bear as much of the cost of the energy transition as their higher-income counterparts .
That recognition was spelled out in the section of the Copenhagen Accord that included a pledge from the world ’ s advanced states to provide the developing world with at least US $ 30 billion a year in financing for energy transition and climate change mitigation projects . Under the accord , funding was supposed to remain at that level for three years and then start rising , reaching US $ 100 billion per year by 2020 .
The Copenhagen Accord was not a binding promise , but it did set up a durable framework for future talks . If nothing else , it served to establish US $ 100 billion per year as the long-term target the UN would keep trying to hit after 2009 with respect to mobilising climate financing for lower-income countries .
So far , the $ 100 billion goal has not been reached and distribution of funds has not been equitable . In 2020 ,
The OECD also stated that it expected the US $ 100 billion annual target to be met in 2022 . At this point , though , the organisation has not been able to confirm whether its forecast was correct . In the meantime , the figures listed here should at least raise questions about the ability and perhaps about the willingness of the world ’ s most advanced countries to keep their promises to their less-developed counterparts .
According to the organisation ’ s webpage , Secretary- General Antonio Guterres is now calling for developed countries to provide double the amount of funding for climate adaptation programs . More is needed , he says , because the cost of mitigation work is rising and because the number of people living in highrisk areas is rising . Countries may need to spend up to $ 300 billion a year by 2030 and $ 500 billion by 2050 , according to the United Nations Environment Programme . Yet these estimated costs are five to 10 times greater than current funding flows .
The Climate Policy Initiative found that the world spends under $ 50 billion on adaptation a year , less than 10 % of climate investments overall . This disparity is less acute but still evident in the $ 100 billion commitment .
More than 60 % of climate adaptation funding to date , with nearly all of that figure coming from public-sector sources , provided thus far by higher-income countries to middle and lower-income countries has taken the form of loans . Not grants given freely , but credits that
Time for Africa to finance its energy transition
34 INTELLIGENTCIO AFRICA www . intelligentcio . com