Opening Statement by Dr. Kevin Kariuki Vice President, Power, Energy, Climate and Green Growth, African Development Bank Group at the Civil Society...

Ministers and representatives of Governments,

Distinguished participants,

Ladies and gentlemen,

Today’s forum is timely. Coming as the global community readies itself for the 27th Conference of Parties (COP 27) on climate change in Sharm El Sheikh. In exactly a month. I am therefore proud to report that the African Development Bank is working closely with Egypt to make COP 27, or the “African COP” as we fondly refer to it, a watershed moment for climate action. At global level, for Africa, and for Egypt.

Allow me, therefore, to share with you some insights on what we expect at COP27, as we embark our CSO Engagements this morning.

First is the need to build on, and generate momentum on the progress, from COP26 in Glasgow. At COP 26 important decisions and commitments were made on various issues such as mitigation, adaptation, loss and damage, and climate finance. However, a lot more could have been done, and it is therefore important that there is demonstrable progress on commitments made. This is important for purposes of engendering trust between developed nations and developing countries on the importance of collaboration regarding the Paris Agreement’s goals – e.g. the $100 billion pledge and doubling their adaptation finance, relative to 2019, by 2025. We must also start to consider the post-2025 climate finance targets, and particular attention to Africa’s special circumstances and needs. This is important because, despite being the continent most vulnerable to, and least adaptive to the impacts of climate change, Africa accounts for only 3% of global climate finance. This amounted to only about 20 billion in 2020. Yet, according to the Bank’s 2022 Africa Economic Outlook, based on aggregation of its NDCs, Africa’s needs are estimated at an average of 127 billion dollars a year through 2030. This is why to bridge the climate finance gap, in 2021 the African Development Bank allocated 41% of its investments as climate finance, of which 67% was adaptation finance, against targets of 40% and 50% respectively. You will be pleased to note that the African Development Bank was the first multilateral development bank to meet and indeed exceed the 50:50 parity between adaptation and mitigation finance. A point that was acknowledged and praised by the UN Secretary General during the UN General Assembly in 2021. It is also for this reason that the Bank has committed to mobilizing $25 billion as climate finance by 2025, and last year went ahead to join forces with the Global Centre on Adaptation to mobilize $25 billion for adaptation on the continent. This is also the reason that in its new climate change and green growth framework, the Bank ambitiously seeks to increase Africa’s access to global climate finance from the current 3% to 10%. Finally, the goal to bridge the climate finance deficit, improve the efficiency of access to climate finance and make climate finance more affordable for the neediest countries in Africa is what inspired the Bank to conceive the 13-billion-dollar Climate Action Window that we are considering to establish in parallel with ADF-16 replenishment. Second, COP 27 provides an excellent opportunity to profile adaptation as key global and continental priority To date, global attention is heavily skewed in favor of mitigation. As a result of which, today, mitigation receives more than 90% of global climate finance, leaving adaptation grossly underfunded. At the same time, and although the continent is only a minute contributor to greenhouse gas emissions, accounting for 3% of historical GHG emissions, the latest IPCC report indicates that Africa is warming faster than the global average. We also understand that Africa’s climate change is locked in for the next 20 years. We will therefore become increasingly susceptible to extreme weather events such as heavy and erratic rainfall, droughts, coastal flooding, cyclones, etc. Leaving millions of our people without food, shelter, adequate nutrition, and a reliable source of livelihood. This means that adaptation, and resilience, to climate change are compelling imperatives. Deliberate and tailored support for Africa is needed. And stronger engagement with all stakeholders, including Civil Society Organization is a must. Hence, in 2021 the African Development Bank and the Global Centre of Adaptation, established the Africa Adaptation Acceleration Program to mobilize 25 billion dollars for adaptation action on the continent. To which, the Bank will contribute a half of the amount. It is also for this reason that under the proposed Climate Action Window for ADF countries, 60% of the resources will be dedicated to adaptation. Moreover, to make the financing more impactful, and growth enhancing, we propose that adaptation action under the Climate Action Window should be largely financed by very concessionary debt or grants. Third is the need for a just energy transition for Africa.

This is another very important topic but needs to be properly contextualized.

Fancy this, despite being home to 20% of the world’s population, Africa accounts for only 6% of global energy demand, and just over 3% of electricity demand. As a result, 600 million Africans lack access to electricity while 1 billion people do not have access to clean cooking and we lose 600,000 people per year – largely women and children, due to indoor pollution. Africa also has the lowest per capita energy consumption globally! To address this evident energy poverty, Africa needs to at least double its energy demand between 2020 and 2040 to meet its development aspirations, including access to affordable, reliable, sustainable, and modern energy for all. To achieve these development aspirations within the confines of the goals of the Paris Agreement, Africa must therefore: Firstly, harness its abundant renewable energy potential, which includes 10,000MW of solar potential of which only 1% has been utilized, 350 GW of hydroelectric potential, 110 GW of wind potential; and the 15 GW of geothermal potential.

The African Development Bank will be pivotal to this. Already the Bank’s proportion of renewables in its energy investments has grown to over 85% since 2016, since we started our New Deal on Energy for Africa.

Secondly, we must use the vast renewable energy for production of cost-competitive green hydrogen for power production. To replace oil and gas in power generation, and as feedstock for hard-to-decarbonize sectors like steel, chemicals, long-haul transport, shipping, and aviation. Thus, the Bank is considering participating in the development of the world’s largest green hydrogen plant in Egypt, and only last week hosted the Africa Green Hydrogen Forum. Thirdly, we must significantly increase intra- and inter-regional interconnection of power grids. This is why the Bank is proud to play a leading role in the development of Africa’s Continental Power Masterplan, whose objective is to establish viable power interconnections that support the proposed Africa Single Electricity Market. On fossil fuels, we stopped investing in coal projects for more than 10 years ago and formalized this position late last year—when we also committed to assist member countries whose economies are coal-dependent prepare just energy transition plans. But, in line with the Paris Agreement, the Bank will strategically support Africa’s natural gas sector, to facilitate the transition to clean energy and promote climate adaptation and climate resilience. This is because, gas is an enabler for increased integration of renewables in the energy mix, as its flexible generation readily compensates for loss of solar/wind generation in case of sudden weather changes. And moreover; Who would begrudge Gabon if it exploited its gas for economic development whilst continuing to absorb more than a third of France’s annual total GHG emissions? Would it not be beneficial for Tanzania to use its natural gas to increase its population’s access to clean cooking from the current 2-4.5%, while reducing emissions from use of biomass or charcoal and reducing deforestation? Not to mention saved lives. Yet, this is how China and Indonesia have managed to increase their access to clean cooking to 80%. And, why can’t South Africa use its new gas finds or imports from Mozambique to safeguard its security of supply by converting its newer coal plants to run on gas – reducing emissions by about 40%, pending development of cost-competitive green hydrogen? Apart from nuclear power – which has very long lead-times to commissioning, there is simply no other viable technology that can guarantee South Africa’s security of supply in the medium-term. Today, some European countries are even un-mothballing their coal plants to guarantee their security of electricity supply, while the likes of the US and UK have reduced their emissions on account of switching from coal to gas power generation.

This is the context that must be borne in mind whilst considering the African Development Bank’s investment in gas.

Four the Civil Organization has a critical role to play The Bank’s engagement with Civil Society has never been more important than in the context of the climate change, exacerbated by the impacts of COVID-19. We are committed to a people-centered development agenda, of which increased engagement with civil society is key, as we seek to build adaptive capacity for resilient growth post COVID19. COP27 therefore presents a great opportunity to center Africa’s needs, and aspirations on people. Hence, urgency to foster enhanced stakeholder dialogue to amplify Africa’s positions. The Bank is committed to engaging in permanent and constructive dialogue with all African climate change stakeholders, including the Civil Society, to deliver tangible results and ensure a successful COP27 for Egypt, and for Africa.

I thank you for your kind attention.