AfDB to provide $25 billion for Africa’s Climate Finance by 2050
The African Development Bank (AfDB) has said it will commit $25 billion to Africa’s Climate Fund.
The Banks’ Chief Executive Officer, Dr. Akinwunmi Adesina said this on Tuesday, September 5 at the ongoing African Climate Summit in Kenya.
According to him, the Bank is committed to contributing $25 billion to the continent in funding climate finance, to accelerate the transition to cleaner energy sources.
During his speech at the Summit, he said that although Africa needs to make use of its vast renewable energy potential, the continent must also make use of its vast natural gas resources to close its wide energy access gaps. He said:
- “At the national level, we must accelerate actions on climate adaptation and that is why the African Development Bank has committed to providing $25 billion to providing climate finance by 2025.
- “We have also launched the African Adaption Act Commission programme together with the Global Centre on Adaptation, the largest climate adaption programme in the world. Africa must develop with what it has not what it does not have.
- “We cannot power Africa with potential. We must truly unlock Africa’s renewable energy potential. That is why the Africa Development Bank is implementing $20 billion to harness the power of solar and deliver electricity to 250 million people.
- “We must power every home, school, and hospital and provide stable, affordable and reliable power. But we must be pragmatic, Africa must use its natural gas and combine it with renewable energy”.
Backstory on the use of natural gas in Africa
Dr Adesina echoed the same thoughts on the use of natural gas in Africa during the November 2022 COP 27 event in Sharm el Sheikh, Egypt. At the time, he said Africa must have natural gas to complement its renewable energy because even if Africa were to triple its production of natural gas from current levels, its contribution to global emissions would only rise by 0.67%.
According to him, Africa should not be penalized for using natural gas to complement renewable energy. He said:
- “Natural gas is needed to balance out the electricity supply given the intermittent nature of renewables. We must recognize the special nature of Africa. Africa has the highest level of energy poverty in the world.
- “My interest is how Africa uses natural gas as part of its energy mix to provide electricity for 600 million people today that don’t have access to electricity.”
It is important to note that the October 2022 World Oil Outlook from the Organization of Petroleum Exporting Countries (OPEC) says that natural gas will be the second-largest fuel in the global energy mix by 2030. According to the outlook, gas demand is projected to increase by 19.6 million barrels of oil equivalent per day (mboe/d) to 56.3 mboe/d in 2045, supported by demand in all sectors.
What you should know:
The AfDB had previously made the $25 billion commitment during COP 27 in November 2022. At the time, the Bank said it has significantly increased access to climate finance for low-income African countries with a target of $25 billion by 2025, positioning Africa’s financial sector at the forefront of financing innovations.
