Mohieldin: Implementing Climate Action in Africa Requires Different Finance Sources

Dr. Mahmoud Mohieldin, UN Climate Change High Level Champion for Egypt and UN Special Envoy on Financing 2030 Sustainable Development Agenda, said that implementing climate and development action in Africa and developing countries requires mobilizing different sources of finance and investment, and integrating public, private, local and external sources of funds.

This came during his participation in a seminar entitled “Breaking Boundaries: Unleashing Greening Investment Horizons in Africa and Developing Countries”, organized by the Ministry of Planning and Economic Development, UNDP, and UN-SPBF/UNEP, with the participation of Dr. Hala Elsaid, Minister of Planning and Economic Development, Alessandro Fracassetti, UNDP Resident Representative in Egypt, and a number of Ministers from Africa and developing countries.

Mohieldin explained that integrating different sources and tools of financing will help bridging the finance gap that Africa and developing countries are suffering from regarding climate and development action. 

He pointed out that although developing countries need about $1 trillion a year to finance climate action until 2025, and more than double this amount until 2030, developed countries have not yet fulfilled their pledges to finance climate action in developing countries with $100 billion annually.

In this context, Mohieldin said that despite the importance of external financing, governments should do more to mobilize and strengthen internal sources of financing, which play the greatest role in implementing national plans and visions for sustainable development.

He confirmed the need for governments in Africa and developing countries to link public budgets to their national climate and development plans and visions and their nationally determined contributions (NDCs), adding that the participation of the private sector in financing climate action, especially adaptation activities, should be strengthened, especially that the contribution of the private sector in financing adaptation projects worldwide does not exceed 2%.

In this regard, Mohieldin highlighted the Sharm El Sheikh Adaptation Agenda that has been launched during COP27 last November, which includes five key areas of work that represent promising investment opportunities: agriculture and food, water and nature, coasts and oceans, human settlements, and infrastructure.

Mohieldin stressed the importance of partnerships between governments, multilateral banks and international development finance institutions to enhance the role of these banks and institutions in financing climate and development action in developing countries, and encourage the private sector to participate more in financing and implementing climate projects.

The climate champion confirmed the importance of Africa and developing countries to activate innovative financing instruments such as debt swaps for investment in nature and climate, and exploiting these countries for their natural resources and balances such as carbon credits, expressing his happiness for the launch of Africa Carbon Markets Initiative (ACMI) that has been launched during COP27 and, since then, it enjoys a governmental support, big interest from international financing institutions and active participation from private sector companies.

Mohieldin stressed also the need for international financing institutions to adopt concessional standards for lending, especially when it comes to financing climate projects in Africa and developing countries. 

In this regard, he referred to the “1% for 1.5 degrees” proposal, which includes granting soft loans with maximum 1% of interest rates with long-term grace and repayment periods.

In the end of his speech, Mohieldin clarified that achieving climate and development goals requires the availability of three elements: technology, fair and adequate financing, and change of thoughts and behaviors at the level of all actors. He praised the National Initiative for Smart and Green projects adopted by the Egyptian government, which is a model for localizing climate and development action that combines the three elements mentioned above.