The Economic Commission for Africa (ECA), has emphasised the need to ensure that climate finance from both the public and private sectors flows at the appropriate scale and pace.
Mr Claver Gatete, ECA’s Executive Secretary, said this in a statement at a roundtable on the Sustainable Debt Coalition in Dubai.
Gatete said it would expedite sustainable development aligned with the Paris Agreement and meet the Sustainable Development Goals (SDGs).
“Africa requires 2.8 trillion dollars between 2020 and 2030 to implement its Nationally Determined Contributions (NDCs) under the Paris Agreement but only receives 30 billion dollars annually for climate finance.
“Increasing the number of investable climate and SDG projects and improving their visibility to potential investors and financiers will play a crucial role in attracting more financial support to the continent.
“Yet, there remains a disconnect between investors and projects needing investment,” he said.
According to Gatete, climate, debt, and development are closely intertwined.
He said projections by the ECA showed that some African regions could face Gross Domestic Product (GDP) losses of up to 15 per cent by 2050 due to global warming.
“High debt servicing costs constrain countries from making critical investments in climate adaptation and resilience to mitigate some of these losses.
“Various governments, institutions, and leaders, including the UN Secretary-General, Mr Antonio Guterres, urges change.
“A G20 expert group report recently estimated that, by 2030, developing countries will require annual incremental investments of 1.8 trillion dollars for climate action and 1.2 trillion dollars for achieving the SDGs,” he said.
According to Gatete, efforts are needed to ensure that countries in debt distress have access to a functional debt resolution mechanism.
He said the G20 Common Framework needed comprehensive reform to enhance effectiveness, timeliness, and transparency.
“There is a need to adapt debt instruments to a more shock-prone world.
“Therefore, to prevent countries from sliding into debt distress when facing climate-related disasters, there is a need to strengthen automatic stabilisers.
“The expansion of climate-resilient debt clauses, which suspend debt service payments in the event of such shocks, is crucial and should be urgec for all new sovereign debt issuances,” he said.
The ECA boss stressed the need to make debt more affordable, saying that guarantees, including those from MDBs, could reduce market borrowing costs for developing nations.
“Additionally, guarantees can serve as catalysts for innovative financing tools such as issuing sustainability-linked bonds as demonstrated recently in Rwanda.
“The Commission has been serving as the temporary secretariat of the Coalition and remains dedicated to supporting global debt architecture reforms.
Meanwhile, at a side event titled Regional Platforms for Climate Finance: Unlocking Climate Finance Flows Through Project Acceleration, Gatete highlighted the need for implementation labs or ilabs.
He said they offered opportunities to foster collaboration and explore strategies for unlocking predictable, affordable, and sustainable financing for climate action and the SDGs in Africa.
Gatete then called for a comprehensive approach to bridge the significant climate and Sustainable Development Goals (SDGs) financing gap and increase climate action ambition.