Canada, AfDB sign US$106m climate fund
BUSINESS REPORTER
Canada and the African Development Bank (AfDB) have signed an agreement formalising special fund aimed at providing concessional loans to climate change-related projects with a strong gender-responsive component.
The fund, Canada–African Development Bank Climate Fund (CACF), will be capitalised through a combination of a CAD 122.9m (about US$98m) repayable contribution, aimed at providing concessional loans for both sovereign and non-sovereign operations plus a CAD10m (about U$8m) grant contribution for complementary technical assistance. AfDB will administer the fund.
Speaking at a virtual signing ceremony to conclude the agreement, held l March on the sidelines of the Canada-Africa Clean Growth Symposium last week, Canada’s Minister of International Development, Karina Gould, said the investment, with its strong gender footprint, recognised “the critical role that women need to play in climate action, and supports their efforts to mitigate and adapt to the effects of climate change.”
“Climate change is one of the most important challenges of our time…And, although we are all affected by it, we in Canada know that not everyone is affected equally…that means that vulnerable and marginalised people are bearing the brunt of this crisis,” Gould said.
CACF resources will be deployed in innovative low-carbon technologies, renewable energy, climate-smart agriculture, sustainable forestry, water management, and climate-resilience projects. The fund will finance climate change related projects in the AfDB’s regional member countries, including those that demonstrate a strong gender equality focus. The empowerment of women and girls will be an objective across all concessional financing of the CACF, aiming at direct, measurable gender equality outcomes.
“In building back Africa, climate resilience is very important… This is why I’m delighted and thrilled with the Canada-African Development Bank Climate Fund that we are launching today,” said AfDB president Akinwumi Adesina.
He thanked Canada for its “tremendous” support to the Bank in terms of general capital increases, temporary callable capital, and the support that Canada has given to Africa through AfDB.
Adesina said the resources long-term financing and would “provide long-term capital to the private sector and to the public sector” .
“It also provides it at affordable levels for countries…What I like most about it is that it looks at multi-sectoral use of this financing…all these things are very important to support Africa in climate adaptation and mitigation,” he said. “Canada has always been there for Africa…Canada is a great friend of Africa.”
AfDB’s financing for climate has increased fourfold to 36% of its total portfolio by 2019 from 9% in 2016.
The bank has committed to providing US$25bn in climate financing by 2025.
