Your Excellencies and ladies and gentlemen,
We congratulate the Government of the Arab Republic of Egypt for having convened this forum- no issue requires greater cooperation than finding solutions to the climate crisis.
The essence of cooperation requires partners willing to listen, and partners willing to act.
UNECA has been delighted to co-convene the forum for African ministers to engage ahead of COP 27, on issues which can transform the finance landscape.
For this African COP, we are seeking to not only have pledges at COP27, but to redefine the landscape for climate finance.
The unfulfilled 100 billion USD promise is one which threatens to put cooperation for climate action at risk. We have to recognise that at this juncture, the succession of crises from the COVID19 pandemic to the war in Ukraine has fractured the ability to address financing for development.
Africa’s NDCs encapsulate over 3 trillion USD worth of investments in adaptation and mitigation.
Achieving energy access alone, in line with SDG7, represents a 500 billion investment by 2030 for African countries.
Official development finance must act as a catalyst to unlock additional financing in Africa and the most climate vulnerable countries. And if done right, can create the opportunity to create the market conditions for African countries to have predictable access to climate finance.
We need to prioritise African agency in the mobilisation of resources.
In that context, the issue of access to private sector finance, and for it to be affordable is key for African countries, and this is why a key focus of the event has been the means of reducing the cost of green borrowing.
Green Bond financing has become increasingly the vehicle used to channel finance into climate resilience. The overall issuances of green bonds more than doubled between 2019 and 2021 globally. But Africa has only a 0.4 % share of these issuances.
The high cost of issuance is a key part of the issue, as is the limited opportunity for trading of African bonds on the secondary markets.
It is in this context that ECA has supported the development of a liquidity and sustainability facility (LSF). This could generate savings of up to 11 billion USD in five years on interest rates for African sovereign issuers.
We must also use this African COP to definitively link debt issuances to climate resilience. The use of key performance indicators set by countries themselves, aligned with their NDCs is a key way to translate the ambition expressed by African countries to affordable climate linked investment.
We welcome the proposed creation of a Sustainable Sovereign Debt hub to support countries to be able to refinance existing debt or issue new debt aigned with Key Performance Indictors for climate.
This hub would allow countries to propose swaps of expensive existing debt to generate new resources to invest in climate resilience and also allow new issuances to be done linked to climate resilience objectives.
Excellencies ladies and gentlemen,
Mobilising predictable sources of revenue is a priority for African countries, and in this context ECA has been supporting the development of capacity of African countries to access carbon markets. Specifically, ECA has supported the development of a harmonised protocol and the creation of a regional registry for the potential issuance of carbon credits by countries of the Congo Basin Climate Commission.
A high integrity carbon market can stimulate ambition to develop sustainable value chains that protect Africa’s natural capital. Critically it can create a direct incentive to prioritise climate resilience while raising resources that can be invested in addressing climate goals as well as the Sustainable Development Goals more broadly. ECA has estimated that if African countries are able to trade their carbon at at least 50 USD per tonne, this creates a flow of around USD 15 billion per annum.
Finally, allow me to also highlight UNECA’s role in facilitating the development of a pipeline of projects for the continent. We convened the first of regional round tables on climate finance in Addis Ababa from 2nd to 4th August, where over 100 billion USD of projects were identified both in the adaptation and mitigation space. We have had realistic conversations on how these projects can be financed- in many cases they cannot get off the ground without de-risking support. But what is clear is their transformative impact, and this must drive us to make them happen
Your Excellencies, ladies and gentlemen,
UNECA is proud to support this co-convening which is not only critical for a successful African COP, but which can contribute to redefining development for the African continent.
These are the enablers that will allow implementation to happen, and to be done at scale.
African countries need support- and promises must be kept. But African countries are determined to also be the owners and drivers of their own solutions. This is what we we have seen at this ICF and we congratulate the Government of Egypt and the COP27 president designate once again on this leadership.
Thank you.