Tired of Waiting for Climate Finance, Africa Sets Up Green Banks

(Bloomberg) -- With promises of climate finance from the developed world having largely remained unfulfilled, African nations are now looking to fill the gap themselves.

Egypt, Morocco, Benin and Ivory Coast are setting up so-called green banks under the guidance of the African Development Bank, according to Audrey-Cynthia Yamadjako, the lender’s principal climate officer. Rwanda, which had already been in the process of establishing such an institution itself, will begin lending to climate projects in 2024.

A 2009 pledge by developed nations to provide $100 billion in annual climate finance for developing countries that have been hit hard by climate change remained unmet until last year, according to Organization for Economic Cooperation and Development data.

In the intervening years, the need to build infrastructure to resist extreme weather, guard against droughts and floods and build clean-energy plants across Africa has surged. Local, climate-project focused banks that can tap concessional finance and lend in local currency, reducing project risk, are seen as one solution.