Experts meeting in Abidjan, Cote D'Ivoire, have agreed to establish a new platform on finance for climate action under the Economic Community of West African States (ECOWAS).
It is set to be launched at this year's annual UN climate change conference – COP23 – to be held in Bonn, Germany in November 2017.
The initial role of the platform will be to finance renewable energy and energy efficiency initiatives by acting as an investment catalyst.
Following this, it will expand to include emission reduction measures across multiple economic sectors, as well as initiatives that strengthen resilience against climate change impacts such as droughts or floods.
Such action is critical as much of west Africa is already experiencing climate change impacts such as increased temperatures and changed rainfall patterns.
Decided at the ECOWAS Green Investment Catalyst Roundtable in Abidjan on 21 June 2017, participants issued a declaration calling for the establishment of the platform, which will also engage in advocacy work and knowledge dissemination.
Between now and COP23, a task force will work towards the full establishment of the platform. The full declaration can be found at the end of this article.
The event was hosted by the United Nations Framework Convention on Climate Change (UNFCCC), its Regional Collaboration Centre (RCC) in Lóme, the African Development Bank Group (AfdB) and the West Africa Development Bank (BOAD).
The roundtable was held for both private and public sector financial institutions in the region. Its main focus was the mobilization of private sector finance, investment and market development, enabled by public sector interventions and policy alignment.
It was the first in a series of regional meetings in Africa in 2017, with southern and eastern Africa soon to follow.
The process is set to be replicated in 2018 with the United Nations Economic and Social Commission for Asia for south-east Asia and with Dubai Electricity and Water Authority in the Gulf Middle East and North Africa region.
The UNFCCC and its five Regional Collaboration Centers have been mandated under the climate action agenda to harness private sector and financial markets and directly support innovations that deliver on targeted climate and Sustainable Development Goal-related interventions in the regions.
ECOWAS GREEN INVESTMENT CATALYST ROUNDTABLE
Declaration of Abidjan
We the representatives of the institutions gathered today, 21 June 2017 at the African Development Bank (AfDB) CCIA Building in Abidjan, Cote d'Ivoire,
Underscoring that finance is key to the accomplishment of the long term objectives of the Paris Agreement and Sustainable Development Goals,
Recognizing that achievement of an inclusive development, requires a redirection of global financial flows and investments “on-the-ground”, towards climate goals,
Also recognizing that the scale of the investments needed to achieve climate aligned development by 2050 has been estimated at USD 1.5 trillion per annum globally, and that a significant scale of investment still needed to reach universal energy access for Africa by 2025,
Underscoring that financing these needs cannot be undertaken by public finance alone and requires a “new model” where public funds “crowd-in” private sector resources, including to reduce the risk of green investments, increase their investment grade and attract institutional investors,
Stressing the significant green investment potential in the Economic Community of Western African States (ECOWAS) region, particularly in the energy sector, which also requires targeted non-financial interventions to help investments move forward to maturity,
Acknowledging that beyond regulatory, political, financing and technology barriers to green investments, capacity-building and access to information for project design as well as the availability of adequate financing to this end remains a significant constrain in ECOWAS,
Call for the establishment of an ECOWAS platform on finance for climate to include the following functions:
- Knowledge dissemination: to serve as a repository and promoter of financial technical assistance for project developers, funding facilities, risk-support, business models, best practices and solutions for private investment in ECOWAS (e.g. IPPs, off-grid etc.);
- Advocacy: to support current and new efforts to align policy constraints (e.g. power and financial regulation in the region including fiscal and reporting incentives) with the long term objectives of the Paris Agreement;
- Investment catalyst: to support the mobilization of investment by the private sector for inclusive growth, using local expertise, in order to benefit to local communities particularly for early stage project development, possibly through the use of digital technology;
- Coordination: to serve as the central hub for harmonizing standards and impacts of finance (green loans and bonds), coordinating efforts across related agencies including efforts and developing local capital markets (stock exchange initiatives) such as green indices and other finance instruments;
- Recognition: to showcase the volume, impact and quality of finance and investment initiatives that deliver on green and climate – via NAZCA and potentially under the Marrakesh Partnership (e.g. finance days) at COP23 and beyond.
Recognize that innovative instruments such as green -debt, -bonds and de-risking financial instruments (e.g. the AfDB Co-guarantee platform, the BOAD Green Bond programme and the FONSIS Renewable & Efficient Energy Fund etc.) can play a major role in the mobilization of financial resources and stress the need to develop commonly agreed standards for “green” bond, as countries and financial institutions in the region seek low-carbon and resilient opportunities;
Call for further awareness raising of regional financial and capital markets on investment opportunities, welcome the efforts undertaken by the regional stock market to introduce green investment indices and other financial instruments and encourage the collaboration with green financial centers that are aligning with the long term objective of the Paris Agreement and the SDGs (e.g. Luxembourg, Paris, London etc.);
Request the continuation of the discussions held today, at a meeting to be hosted by the West African Development Bank (BOAD) in Lome, in September 2017, to take account and agree on a work plan to be developed;
Decide to set up a task force to facilitate the establishment of the ECOWAS platform on finance for climate and consider ways to enhance an existing ECOWAS center for renewable energy and energy efficiency (ECREEE) platform for the functions of the platform described above,
Decide to launch the ECOWAS platform on finance for climate at COP23 in November 2017;
Invite the Regional Collaboration Centre in Lome and ECREEE to coordinate the work of the task force referred to above, in collaboration with the nominated focal point from participating institutions.
Note 1: The organizations who issued the Declaration of Abidjan include the Ministry of Salubrity, Environment and Sustainable Development of Cote d’Ivoire, African Biofuel & Renewable Energy Company (ABREC), African Development Bank (AfDB), Banque Ouest Africaine de Developpement (BOAD), Camco Energy, Cidob Foundation, ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE), Folkecenter, Fonds Souverain d’Investissements Stratégiques du Sénégal (FONSIS), Green Investments in West Africa (GIWA), Groupe ORABANK, Guarantees for Development (Guarantco), Private Financing Advisory Group (PFAN), Rubitech Nigeria Ltd, SUNREF West Africa, UN Climate Change Secretariat, United Nations Industrial Development Organization (UNIDO).
Note 2: The Economic Community of Western African States (ECOWAS) is made up of fifteen (15) member countries that are located in the Western African region, notably Benin, Burkina Faso, Cabo Verde, Cote d’Ivoire, the Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.