Speaking on the sidelines of this month’s UN COP27 Climate Change Conference in Sharm El-Sheikh that ended on 18 November, President of the African Development Bank (AfDB) Akinwumi Adesina described the climate crisis facing the African continent and the importance of the COP27 Conference in an interview with Al-Ahram Weekly.
What was the significance of the COP27 Climate Conference for Africa?
The fact that the COP27 was held in Africa this year is hugely significant for our continent. This is Africa’s COP —and not simply because of its geographical location, but also because Africa is in the eye of the climate storm.
The COP27 will only be a success to the extent to which it leads to real action. Africa has made its voice heard loud and clear. We continue to trust that our voices will be listened to. The rich nations that have contributed the most to global carbon emissions must take their responsibilities seriously and finally honour their commitments.
Africa cannot afford further delays. The promises made by the rich nations to provide $100 billion per year in climate finance to the developing countries must at a minimum become promises kept. Annually, Africa receives a meagre $18 billion, or only three per cent of total climate finance globally, while our needs are estimated at $125 billion per year.
That figure is also on the conservative side, particularly if the Russia-Ukraine war does not end soon. Disruptions to global trade will intensify and commodity prices will continue to soar if the war continues, and it will lead to prolonged inflationary pressures and rising import bills for grains, fertilisers, and energy.
What form did the AfDB’s participation at the COP27 Conference take?
The bank participated in the COP27 by hosting with other African institutions the Africa Pavilion as a platform for amplifying Africa’s voice and priorities. This is in line with the continent’s common position on climate change, endorsed by African leaders under the Committee of African Heads of State on Climate Change. The Bank’s COP27 participation aimed to ensure that key issues for Africa were not left out of the conference’s resolutions.
These included the recognition of Africa’s specific needs and circumstances on climate change, the critical role of adaptation, climate finance, and loss and damage as key building blocks to chart a low-carbon and climate-resilient future for the continent.
The bank also came to Sharm El-Sheikh to showcase Africa’s ambitious and innovative solutions to address climate change, including the $25 billion Africa Adaptation Acceleration Programme (AAAP), the $20 billion Desert-to-Power Renewable Energy Programme and the bank’s $6.5 billion commitment to fast track the implementation of the Africa-wide Great Green Wall Initiative.
At the COP27, the bank introduced new flagship initiatives such as the Alliance for Green Infrastructure in Africa and the $4 billion to $13 billion African Development Fund’s Climate Action Window as an innovative response by the Bank to the growing climate finance needs of the fragile and most climate-vulnerable countries in Africa.
Finally, we proactively supported the host country Egypt to organise and deliver COP27 as an important milestone for the African continent. We also pledged financial support to Egypt’s Nexus on the Water, Food, and Energy (NWFE) Programme, which is the country’s flagship programme launched at the COP27.
How have global crises since the Covid-19 pandemic affected the African continent?
The COP27 indeed took place against the backdrop of unprecedented global challenges. Africa is facing disruptions from the Covid-19 pandemic, climate change, and the conflict in Ukraine, all of which have caused devastating economic and development setbacks. The solution lies primarily in finance. To recover from the tapering effects of Covid-19, Africa requires about $424 billion by the end of 2022. We estimate that the continent needs about $432 billion in additional financing to address the socio-economic impacts of the pandemic and the war, as well as to support economic recovery this year and the next.
Today, Africa is at risk of stagflation. Real GDP is projected to grow by 4.1 per cent in 2022, down from near seven per cent in 2021. This deceleration in growth highlights the severity of the impact of Russia’s war in Ukraine on Africa’s economy. Vulnerable populations, especially in urban areas, will bear the greatest burden of rising food and energy prices, and in the absence of measures to cushion the impact, this could stoke social tensions across the continent.
The African Development Bank has responded swiftly to avert a looming food crisis. In July, it launched the African Emergency Food Production Facility, a $1.5 billion initiative to support smallholder farmers in filling the shortfall. The bank will contribute $1.3 billion of its own resources to this. The facility also builds on the success of the bank’s highly effective Technologies for African Agricultural Transformation (TAAT) Programme, which has led to significant increases in crop production such as of wheat in Ethiopia and Sudan.
What role does the African Development Bank play in Egypt’s Nexus on the Water, Food, and Energy Programme as well as in the Sharm El-Sheikh Book for Just Finance?
Egypt’s Nexus on the Water, Food, and Energy Programme (NWFE) is expected to accelerate the national climate agenda and provide opportunities to mobilise climate finance and private investments to support the country’s green transition agenda. It was developed on the back of the announcement of Egypt’s 2050 Country Climate Strategy and its nationally determined contributions.
The African Development Bank is leading the mobilisation of financing for the Water Pillar of the NWFE and the technical design of the flagship project Water Desalination using Renewable Energy. The Bank has mobilised nearly $2.3 billion in pledges, or $893.75 million above the funding gap. Beyond the Water Pillar, the Bank has also expressed interest in financing projects in the Food and Energy Pillars of the NWFE. The bank has pledged a total of $625 million — $320 million for the Food Pillar and $305 million for the Energy Pillar.
The bank’s involvement in the NWFE Programme also goes outside of the selected nine operations of the initiative. The Gabal Al-Asfar Project will support the expansion of this water-treatment plant’s capacity from 2.5 million to 3.5 million m3 of water per day and is well aligned with the NWFE by supporting the provision of clean water for agricultural purposes.
How much financial support has the African Development Bank extended to Egypt since the onset of the Russian-Ukrainian conflict?
The African Development Bank has extended $540.5 million towards three operations. The first, a one-tranche policy-based operation ($271 million), was approved in July 2022 to finance Egypt’s Food Security and Economic Resilience Support Programme. This supports the government’s efforts to mitigate the impact of global shocks resulting from the Russian invasion of Ukraine on the domestic economy and to preserve resilience. It includes two major components: support for the food security response and building private-sector and fiscal resilience.
A second $109.5 million project is the Water Recycling in Agriculture, Gabal Al-Asfar Project. The bank’s board approved this in early November 2022, and its objective is to expand the treatment capacity of the Gabal Al-Asfar Wastewater Treatment Plant and use the treated water for agriculture, notably to irrigate up to 70,000 acres.
The project will benefit more than five million people in the broader service area covering the eastern side of the River Nile in Cairo-Ismailia, mainly in the Cairo governorate on the East Bank of the River Nile. This will result in increased incomes, economic off-farm activity, and enhanced food security in these communities. The project will also create more than 3,200 job opportunities during implementation and operation.
The third operation is a long-term loan facility ($160 million) to Banque Misr to finance Egyptian businesses that invest in manufacturing, ICT, and agribusiness, which are key sectors of the Egyptian economy. The overall goal is to open up new possibilities for small and medium-sized businesses to invest and grow in order to contribute to food security and strengthen the dynamics of industrial transformation and modernisation.
*A version of this article appears in print in the 24 November, 2022 edition of Al-Ahram Weekly.