Climate Change Could Wipe Out 15 Percent Of Africa’s GDP By 2030, EIB President Warns

(AFRICAN EXAMINER) – President of the European Investment Bank (EIB), Werner Hoyer has warned that climate change could wipe out 15 percent of Africa’s Gross Domestic Product (GDP) by 2030, which would mean an additional 100 million people in extreme poverty by the end of the decade.

Hoyer made the observation while addressing the Africa Adaptation Summit in Rotterdam on Monday. The event which was organized by the Global Center on Adaptation (GCA), is the first-ever global summit to focus solely on accelerating climate adaptation in Africa.

The summit brought together leaders from government, the United Nations, and business for the first-ever global summit to focus solely on accelerating climate adaptation in Africa.

He said the scenario playing out in Africa is particularly unfair considering that the continent has contributed only marginally to climate change. He also noted that the EIB has been a strong partner of African countries for more than 55 years.

“Through our new development arm EIB Global we are strengthening our presence in Africa and are mobilising private capital at scale for innovative green technologies, such as green hydrogen. We will use this experience to build new partnerships to unlock private finance for adaptation projects, including under the Africa Adaptation Acceleration Programme”, he said.

In September 2021, the EIB and GCA agreed a partnership to mobilise action in regions of the world that are particularly vulnerable to the impacts of climate change, such as the African continent, where the EIB and GCA collaborate on the Africa Adaptation Acceleration Program (AAAP), an initiative developed by the African Development Bank (AfDB) and GCA to scale up adaptation action in Africa by mobilising $25 billion.

The EIB and GCA are working closely with the African Development Bank (AfDB) and other multilateral development banks, as well as international financial institutions, with the goal of providing financing for projects that fall under the AAAP’s pillars. These include infrastructure resilience, youth empowerment through jobs and entrepreneurship and climate-smart digital technologies for agriculture and food security.

President Hoyer opened the leader’s roundtable of the conference to present the investment challenges to increase adaptation finance in Africa and outlined how the EIB can support adaptation projects.

Over the last five years the EIB has provided €18 billion for public and private investment across Africa. This, according to him, includes working with African and international partners to strengthen drinking water and wastewater treatment in cities throughout the continent including Bamako, Cairo, Dakar, Kigali, Niamey, Ouagadougou and Tunis, enabling smallholder farmers to adapt agriculture to a changing climate and strengthen measures to reduce land degradation.

The EIB Climate Adaptation Plan supports the objectives of the EU Adaptation Strategy inside and outside the European Union. The EIB has pledged to triple its global climate adaptation finance by 2025.

The EIB screens all projects it finances for the risks of climate change and ensure they are adapted to future changes. In the European Union, a new advisory service called ADAPT will help public and private sector clients understand how climate change affects their operations.

He further explained that outside the European Union (EU), the EIB will increase support for climate-smart digital technologies for agriculture, climate-resilient infrastructure, cities and entrepreneurship to accelerate innovation in adaptation.

“The EIB will increase the share of financing it can provide for projects that are primarily motivated by adaptation to 75 percent of the project cost globally and to 100 percent in the least developed countries and small island developing states”, he added.

Hoyer observed that this is not the time to neglect challenges as there is a sharp rise in energy and food prices globally, adding that the impact of climate change just make things worse.

“So…it is not the time for financial institutions to neglect or dodge responsibilities. To that end, the EIB has come forward with a promise of significant focus for support to adaptation, including of course in Africa, as part of the EU’s commitment for a strong partnership between the two continents.

“As the EU’s Climate and Development Bank we must have adaptation in mind in everything we do. This is why the EIB is now implementing the Adaptation Plan that we announced in Glasgow last year, through which we are promoting faster and more systemic adaptation worldwide, in line with the new EU Adaptation Strategy”, he further disclosed.

He also acknowledged that pervasive market failures are holding back investment in adaptation, noting that this is why, at the EIB they are committed to a three-fold increase in adaptation finance over the next few years.

“To scale up adaptation finance, particularly in Africa, we are ready to take on more risk. Earlier this year we launched EIB Global, a new specialised branch of the EIB dedicated to development finance. This will increase the EU’s value proposition in adaptation investment: more people and expertise on the ground, more tailored financial solutions and a strong Team Europe approach.

“In Africa we stand shoulder to shoulder with the AAAP and we are exploring ways of potentially making our Advisory Platform in Europe “ADAPT” available to clients in Africa and globally as well.

“You can count on the EIB Group. We greatly appreciate the work of our partners at the GCA to better understand and alleviate the barriers to adaptation finance and I hope the Summit today will help prepare the way for increasing not just the volume of adaptation finance, but also the right kind of financing with the right level of impact”, he stressed.