A POST COP28 DIALOGUE: What are the key takeaways for the African financial Sector?

In this session, co-hosted by AFAC and Making Finance Work for Africa MFW4A, panelists reflected on the critical resolutions from COP-28 and their implications for African Financial Institutions. The panel comprised Ade Ayeyemi, Board Charman MWF4A, Rachael Antwi, Oluranti Doherty, Director of Export Development, Africa Export-Import Bank, and Davinah Uwella Milenge, Program Coordinator, Climate Change and Green Growth Department of the African Development Bank. The webinar was attended by 290 participants, including bankers, insurance practitioners, capital markets professionals, and financial regulators.

The meeting centered on the COP28 resolution regarding the Loss and Damage fund and the global adaptation goal, specifically discussing how African financial institutions can address the related challenges and take advantage of the opportunities. The speakers emphasized the significance of the US $700 commitment to the Loss and Damage fund and the global adaptation goal, signaling to African financial institutions to incorporate climate adaptation into their Sustainable Finance strategies. They also stressed the importance of developing effective financial instruments to facilitate the deployment of the pledged funds into adaptation projects across Africa. Additionally, the speakers identified African capital markets as crucial for aligning international and domestic capital investments with climate action.  A vital aspect of this process is the establishment of credible metrics for climate action, which involves endorsing Africa-led definition frameworks.

Some African financial institutions, such as Ecobank, have implemented sustainability strategies and are in the process of creating green financial products. However, these individual initiatives can be scaled up by ensuring market-wide transparency and supportive policies to address the lack of awareness about green financial instruments. African financial institutions focusing on sustainability need to develop their skills in product and project development further to utilize the untapped green potential of the African continent fully. Addressing these challenges requires a multi-stakeholder approach to sustainable finance involving collaboration among financial institutions, regulators, and development finance institutions. The key messages are summarized as follows:

Key Take Aways 

1. The COP 28 resolutions on the $700 million Loss and Damage fund and the global goal on adaptation call for scaling up of climate adaptation products within African capital markets to facilitate the financial commitments into Africa
2. Key aspects of this transformation are establishing and legitimizing fit-for-purpose standards and metrics for African climate action and capacity building in developing green projects and financial instruments.
3. These transformations require an eco-system approach, bringing together private and public financial sector players to collectively address Africa’s sustainable finance challenges and opportunities.

Panelists at the Post COP28 Dialogue on key takeaways for the African financial sector, 5th March.