It has been a busy month for climate change discussions, with COP29 bringing together nearly 200 countries in Baku, Azerbaijan, and reaching a breakthrough agreement that will:
Note the focus on the anticipated role of the private sector. Known formally as the New Collective Quantified Goal on Climate Finance (NCQG), Simon Stiell, Executive Secretary of UN Climate Change calls the new finance goal “an insurance policy for humanity, amid worsening climate impacts hitting every country.
Like any insurance policy – it only works – if premiums are paid in full, and on time. It will keep the clean energy boom growing, helping all countries to share in its huge benefits: more jobs, stronger growth, cheaper and cleaner energy for all.”
On the sidelines of COP29, the African Development Bank (AfDB) unveiled a new report that reveals that the exclusion of Africa’s natural assets from the continent’s GDP measurement is hindering crucial financial flows. The report outlines key actions to value and integrate natural capital into Africa’s GDP.
Africa’s vast natural capital, essential for sustainable development, includes significant clean energy potential, arable land, marine resources and two of the world’s largest rivers, the Congo and the Nile. Notably, the Congo Basin remains one of the few regions worldwide that absorbs more carbon than it emits.
“Africa contributes significantly to global public good for tackling climate change with its vast resources of natural capital, yet its vast natural capital has been undervalued,” stated Dr Akinwumi Adesina, President of the African Development Bank.
He added that this situation makes Africa “green rich but cash poor.” Experts agree that by appropriately valuing Africa’s green wealth, countries can unlock financial flows into investments to boost their economies and even improve their credit ratings.
Earlier this year, the AfDB unveiled its 10-year strategy for “Africa’s Green and Inclusive Future: Climate and Biodiversity Solutions,” which focuses particularly on collaboration with the private sector and supporting and growing entrepreneurship and business development, including “scaling up private sector finance for transformative investments.”
The strategy document outlines how the AfDB will also invest in Africa’s best asset: “its vibrant young men and women. Africa’s population, which is the youngest and fastest growing in the world, presents the continent with an unparalleled demographic window of opportunity.
Bold initiatives will support Regional Member Countries as they tangibly and strategically invest in young people. The Bank will continue to convene stakeholders, including the private sector, to support youth entrepreneurs through skills development, financing, and business development.”
The bank’s support for African financial institutions has extended access to financial services for small enterprises and entrepreneurs, with a strong focus on empowering women-led African businesses.
“By 2033, the private sector will be at the heart of the African Development Bank’s work,” says the financial institution. Over the next decade, the AfDB will substantially scale up and deploy its public and private sector operations in complementary ways.
Hence, there are a lot of expectations of Africa’s green entrepreneurs and green investors in terms of the development of cutting-edge products and services along with providing employment and contributing to the continent’s GDP. However, many face significant domestic challenges, including the lack of access to finance, support services, capacity and know-how.
Meanwhile, Africa already boasts many pioneering companies that have emerged as key players in the green economy, particularly in renewable energy and technologies with a growing focus on combating climate change.
Companies at the forefront of the movement towards a cleaner, more sustainable future, using cutting-edge and innovative strategies, from solar and wind power to hydropower, tidal, and geothermal sources, include:
Meanwhile, there is a veritable tidal wave of young green startups and investor-ready ventures valued at billions of dollars for keen investors eager to get involved at the start of promising projects. The Earthshot Prize was hosted in Africa for the first time this year and the winners in the five categories were announced in Cape Town this month. Three of the winners were African: GAYO (Green Africa Youth Organization) from Ghana and Keep IT Cool and d.light, both from Kenya.
In addition, Africa’s Green Economy Summit has released its new list of more than 50 projects that will get the opportunity to “pitch” their businesses to investors in Cape Town in February next year. There will be two startup stages: one for startups and SMMEs and one for infrastructure projects across six different green and blue sectors. Click here for more information on projects that have already been approved.
“My advice to other green entrepreneurs is to ask people what they think about your idea,” says Bouwer van Niekerk of STROOM, a Stellenbosch-based start-up in cargo e-bikes. They were able to make some valuable connections at their pitch at the previous edition in February this year.
He adds: “However, if you ask too many times what people think, the answer will usually be that it cannot work. Big ideas and ideas that can make a change are sometimes not the norm. So, my advice would be to take the idea and execute on it as quickly as you can, even if it’s just a very small case study, and test your assumptions with that case study.” [Read and watch the full interview here.]
– This article first appeared in the GREEN ECONOMY EXPRESS, issued by Africa’s Green Economy Summit.
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