Green Investment: AfDB’s New Tools Raise Hope For SMEs In Africa

Posted by Eric Ojo Business News, Latest Headlines Tuesday, September 20th, 2022

(AFRICAN EXAMINER) – Small and Medium Enterprises (SMEs) in Africa are at a vantage position to benefit maximally from the newly released series of toolkits by the African Development Bank (AfDB).

The toolkits are aimed at assisting SMEs in tapping green investment opportunities contained in countries’ Nationally Determined Contributions (NDCs) under the Paris Agreement.

Released under the Bank’s Private Sector Investment Initiative for NDCs, the toolkits were launched on the sidelines of Africa Climate Week, which took place in Libreville, Gabon, from 29 August to 2 September.

The side event was held under the theme, “Scaling Climate Action Through Climate Technology and Innovation by SMEs in Africa”.

The package comprises toolkits on climate risk screening and opportunity assessment tool, business carbon footprint tool, and a guidance note on mainstreaming climate and green growth into Bank’s line of credits. They will help strengthen the capacity of financial institutions and small companies to invest in climate action under the NDCS.

AfDB’s Officer in charge of Climate Change and Green Growth, Dorsouma Al Hamndou said the toolkits were designed to promote the integration of climate actions into private and financial sector lending operations in African financial institutions.

“They will help African SMEs and financial institutions to develop and finance climate-informed projects and support the implementation of the Paris Agreement in African countries”, he said.

It is estimated that the cost of Africa’s adaptation to climate change will reach as high as $30 billion a year by 2030. To help address this gap, the AfDB in 2018 launched the African Financial Alliance for Climate Change (AFAC) as a platform for Africa’s financial sector to mobilize climate finance and stimulate low carbon and climate resilient investments.

The Bank and Natural Eco Capital hosted the session, which featured a discussion on how to scale climate action through climate technology and innovation by small- and medium-sized enterprises (SMEs) in Africa.

Natural Eco Capital is a sustainability firm that partners with government, financial institutions and investors on emerging issues relating to natural capital, sustainable finance, climate change and low carbon economy.

Chief Executive Officer (CEO) of Natural Eco Capital, Eugene Itua noted that small and medium enterprises play a vital role in the economic performance of African countries. He said more needed to be done to make these businesses aware of commercial opportunities contained in the NDCs.

Similarly, the Africa Regional Director of Global Centre on Adaptation, Anthony Nyong said the new toolkits would offer a pathway for small firms to take advantage of existing opportunities. “Climate change is a challenge and an opportunity” he added.