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Highlights of Day1 of AGES 24

Private sector investment crucial for transition to green economy

“I am a dear friend of the earth.” With this statement, journalist Onke Ngcuka, the MC for Day 1 of Africa’s Green Economy Summit, set the scene for a compelling day of discussions, presentations and negotiations for all things related to investments in the green economy.

“We are in deep trouble. Mother Nature is asking for help, although she has an infinite capacity for restoration,” said Iain Banner during the packed opening session. He is the founder of Go Green Africa, organiser of last year’s Formula E in Cape Town and one of the organisers of Africa’s Green Economy Summit.

Banner welcomed some 500 delegates, including Hannah Jones, CEO from The Earthshot Prize, a prize and a platform founded by HRH The Prince of Wales and the Royal Foundation, among the many esteemed visitors in the audience.

An excited Banner shared that the event featured almost 30 start-ups and investment-ready green and sustainable projects presenting an investment pipeline of almost $1 billion, with over 40 financial institutions that are present that will be assessing the projects.

Mobilising global capital
While the continent’s needs more investment in projects, it is possible to mobilise global capital said Sanlam Investment CEO, Carl Roothman.

“What we struggle with in Africa is we do not have enough foreign direct investment into our continent. When you think globally that 20-trillion dollars are being invested into green projects, the African continent is incredibly well positioned to bringing global capital into our economies.”

He added that it was important “to allow the private sector to thrive” in green project development.

Extreme climate events
Wrenelle Stander, Wesgro CEO, said there are significant challenges ahead for the region and the world. She stated that extreme climate events are increasingly impacting business. This has necessitated a rethink in business strategy through targeted investments, with investments moving into new geographies and new technologies.

Stander added that the floodgates regarding investment in renewable energy technologies had opened and that investments in improved water resilience were also underway. Said Stander: “Africa will see a major transformation in the energy space.”

“Never waste a good crisis”
Meanwhile, Western Cape Premier Alan Winde warned that Cape Town runs a real risk of facing future droughts. He said the Mother City still held the record for the city where residents dropped their water usage the most in the world when it was approaching Day Zero in 2017.

“We learnt from Day Zero. Never waste a good crisis,” said Premier Winde. While the Western Cape’s dams are nearly full, this could once again “flip” he said. “That’s why we have to take the responsibility and be aware of the impacts of climate change.”

Referencing floods in the Western Cape over the past few years as well as thousands of fires this year only, Winde said the province felt the brunt of climate change acutely. He added that mitigating these risks through investment and taking responsibility is imperative. His administration is involved in several green economy initiatives.

“The Western Cape has a green hydrogen strategy … and has partnerships with the Northern Cape, Eastern Cape and Namibia. The world is focusing on green hydrogen … in the pipeline is a major investment in the sector to be announced shortly,” said the premier.

The circular economy and e-mobility are other focus areas for the province.

Derisking to bring capital markets in
In the first keynote of the day, Junaid Ahmad, VP of Operations at the Multilateral Investment Guarantee Agency (MIGA) at the World Bank focused on green economy financing solutions, specifically the role of contingent liability. “What we need to do is figure out how to leverage capital markets, how to bring in FDI into development and into the green transition.”

“And that is what we, MIGA, do. We derisk, and by derisking, we bring in private capital markets into development. We derisk political, policy, regulatory and contractual uncertainties. We derisk for equity and debt finance.”

“How effective have we been? For every dollar that we guarantee as MIGA, we bring in $16 of private finance into development.”

Since MIGA was created in 1988, the organisation has been able to leverage $75-billion dollars with their original seed capital of $366 million. MIGA currently supports about 30GW in energy projects worldwide, of which 75% are in renewable energy and 50% are in Africa, including projects in Egypt, South Africa, Burundi and Rwanda.

“Cannot win if you leave people behind”
Zambia’s minister of Green Economy and Environment reported that the country is already seeing the benefits of implementing a “green strategy.”

“We are a mining country,” said Hon. Mr. Collins Nzovu, “and while mining helps with economic growth, it is also a bit of a polluter. Increased production in mining increases pollution. We also wanted to increase the agri sector, but it needs water and energy. These are the components we were dealing with in Zambia.”

He said the country not only needed to transition its economy to a greener one, but “also to an economy that is socially inclusive, you cannot win this war if you leave your people behind.”

Zambia’s Minister of Green Economy and Environment added that “thus far, the overall performance of the country has grown from 1–2% to about 4–5%.”

Public Policy and Regulation to Support Green Growth
Hon. Jacques Assahoré Konan, Minister for the Environment, Sustainable Development and Ecological Transition, Côte d’Ivoire, said Africa is facing unprecedented climate and ecological challenges that threaten the lives of livelihoods of millions of people.

“Extreme weather events, ecosystem degradation and changes in precipitation patterns have devastating impacts on our communities, economy and environment.”

Konan said Côte d’Ivoire has committed to enhancing its mitigation objectives, strengthening its resilience and accelerating forest, land and energy reforms to “contribute effectively to the fight against climate change.”

The country’s ambition is to “unconditionally reduce our greenhouse gas emissions by 30.41% by 2030 using national means, with the conditional objective of taking 98.95% subject to appropriate international financial support.”

“You will understand, therefore, that achieving the goal of carbon neutrality requires investments that surpass the sole capacity of the Ivorian state,” stated the minister.

Need for conducive investment environments

“To be able to attract private sector finance, which is what we need to be able solve the issues of climate change, we need to create conducive environments,” says Harsen Nyambe, Director, Sustainable Environment and Blue Economy Directorate at the African Union Commission, who delivered the last keynote address on the opening day.

He added: “According to the Africa Development Bank (AfDB), private sector financing for climate action and green growth in Africa will require approximately $213-billion annually to be able close the financing gap by 2030. That is no small figure.”

Nyambe said the continent had to ensure that policies were in place “that have stable, economic conditions that will be able to guarantee security to these investments. We also need to make sure that we derisk and incentivise climate compatible and green growth investment through blended finance and other options that are available to us.”

According to the AUC director, one of the major challenges the continent faces is the inability to access climate funds. It is for this reason that the AU established a Climate Finance Unit with the sole mandate to support and assist states in accessing climate funds and attracting investment. This is supported by the government of Canada, Global Green Growth Institute (GGGI), USAID, the UK and Germany among others.

Transforming lives

Harsen Nyambe also reminded the audience that “this whole agenda has a human face. We must make sure that we do not only focus on achieving healthy ecosystems but also on transforming lives. For that reason, we need to make sure that people are actually put at the centre of this transition.”

The African Union is a partner organisation of Africa’s Green Economy Summit, which is centred around connecting the global investment community with investment prospects in Africa’s green economy space.The AU is also hosting a roundtable at the event that forms part of its Green Recovery Action Plan (GRAP) programme that was launched in 2022 to tackle the combined challenges of the COVID-19 recovery and climate change.

GRAP’s aims include promoting green initiatives, enhancing resilience to climate change and supporting AU member States to bolster finance and investment in sustainable projects – a green economic transformation that requires the support of public and private investors.

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