Download Diapositive 1 - African Development Bank

Towards the creation of the
Africa Green Fund (AfGF)
ADB Group Partnership Forum
Mr. Abou Sabaa,
Chairman
AfDB Climate Change Coordination Committee
Tunis
23 March 2012
Structure
1. Background
2. Rationale
3. The AfGF Platform
4. The Fund

Objectives

Linkages with Green Climate Fund

Scope
5. Implementing and Financing Arrangements

Eligibility and Accessibility

Financing Procedures and Conditions
Structure (cont’d)
6. Compliance and Reporting
8. AfDB Institutional capacity
9. Expected role of AfDB
10. Consultation Process
Background

New and additional fast-track resources - $30 billion by
2012

Mobilizing additional $100 billion annually by 2020 to
address needs of developing countries

Africa’s leadership requested climate change
resources flows for Africa region to be managed by
the African Development Bank.

The Africa Green Fund is a response to this request.
Rationale for the Fund

Sub-Sahara Africa received only 12% of Bilateral Funds
and just 4% of Multilateral Financing in 2009-2011

Global funds hosted, governed and administered
outside Africa

Funds have cumbersome access procedures and lack
balance between mitigation and adaptation
Lack of African voice in decision making and funding
priorities
Africa’s priorities now relate to implementing the
Rio+20 Sustainable Development Goals including
transition towards Green Growth


AfGF Platform

The African Green Fund is part of a Platform that seeks
to enhance Africa’s access to existing and new climate
finance.
Enhance Access
to Existing CC
Instruments
Block 1
(internal
governance)
AfGF
Instrument
Block 3 (Scaled up
AfGF Instrument)
Block 2

The Platform is flexible enough to grow overtime and
adjust to the future climate finance architecture.

The focus on short and medium term is on Block 1 of
the Platform
AfGF Platform (Block 1)
Enhance Access
to Existing CC
Instruments
Block 1 (internal
governance)

AfDB will establish a framework to:

Streamline and harmonize existing thematic funds
managed by the Bank (AWF, CBFF, SEFA, ClimDevAfrica).

Simplify operational procedures and improve access.

Create a new facility to support RMCs to transition
towards Green Growth
AfGF Platform (Block 2)
AfGF
Instrument
Block
2(external
governance)

Block 2 involves creation of a new instrument which is
part of long-term strategy for climate finance

AfGF could be either independent of AfDB decisionmaking structure or ADF type of governance structure
both of which involve equitable donors and African
countries.

The instrument seeks to receive, manage and deliver
resources from Fast Start funds and long-term pledges
under Cancun Agreements and other sources.
AfGF Platform (Block 3)
Scaled up AfGF
Instrument (Block 3)

Block 3 is a scaled up Africa Green Fund.

It will seek to receive, manage and deliver funds to
Africa at scale, to be designed and operationalized after
establishment of the Green Climate Fund (GCF).

AfGF will seek to become one of conduits for climate
finance and preferred channel over medium term.
AfGF Goal and Objectives

The goal of the AfGF is to support country-owned and
country-led climate compatible development in Africa

Facilitate access for African Countries to existing and
Bank internal resources

Promote direct and immediate access to fast-start
funds

Support the development of a Low-carbon and
Climate Resilient Economy with transition towards
green growth

Strengthen national institutions and support the use
of country systems for direct access to the Fund

Complement other multilateral/bilateral financial
mechanisms
Linkages between AfGf and Green Climate
Fund

GCF is a global mechanism while AfGF will focus on
Africa specific concerns and priorities and give greater
priority to adaptation.

COP 17 in Durban adopted the establishment of the GCF.

AfGF will seek to become one of the conduits for
resources from GCF without compromising access of
eligible African countries to GCF.

AfGF will provide resources to build capacity and
readiness to access future resources.

AfGf will also assist Bank’s RMCs to develop their Green
Growth Framework
Scope of the Fund



Adaptation
 Sustainable Land & Water Management
 Climate Resilient development
 Natural Disaster management
Mitigation
 Renewable Energy and Energy Efficiency
 Sustainable Transport
 Sustainable land and Forestry
Cross-Cutting
 Assist with state of readiness and preparatory
phase and Capacity building
 Transition towards Green Growth
 Technology development and transfer; capacity
building
 Collaboration with UNFCCC, UNCBD and UNCSD
Implementing and financing arrangements


Access:

African Countries through Direct Access

African Regional Organizations

Recognized public and private enterprises in RMCs

AfDB, other MDBs and International Organizations
operating in Africa
Eligibility criteria:

Development Impact, Potential scale up for
adaptation and low carbon, cost effectiveness and
demonstration potential, national priorities
Implementing and financing arrangements



Financing procedures
An accredited Implementing Entity (IE) shall submit a
Request for Funding to the Secretariat, following some
requirements :
 Each operation will be approved and administered in
accordance with the applicable guidelines of the
concerned accredited Implementing Entity;
 The accredited Implementing Entity will conclude an
agreement with the beneficiary, expressing the terms
of financing and acknowledging the source of finance;
 Eligible expenditures under individual financing will
be determined in accordance with the policies and
procedures
of
the
respective
accredited
Implementing Entity.
Each IE will apply its own appropriate procedures in
developing operations.
Financing Instruments

Instruments include concessional and nonconcessional lending, grants, guarantees and equity

Grants for Adaptation activities and Capacity
development

Concessional for investments to support low-carbon
economic development that have internal rates of
return just above the normal market threshold

Gurantees for credit, regulatory or technology risk
Details will be provided in the Operations Manual of the
Fund.
AfDB institutional capacity
The Bank will put its experience to provide technical
and advisory support to the AfGF

Bank’s total lending volume for 2008-2010 was US$ 24.8
billion from its own resources; cumulative approvals
from 1967-2010 amounted to US$ 89.6 Billion;
cumulative disbursement of US$34.1 Billion.

The Bank is also managing US$ 5.46 billion on behalf of
over 50 funds
Expected Role of the AfDB



Bank as a Trustee
 Bank has experience being a trustee of climate
change funds (NEPAD, CBFF, ClimDev, etc.) and
hosting several bilateral trust funds
 Bank’s responsibilities as trustee shall include fund
management, financial reporting and the execution of
legal agreements.
 Additional staff will be recruited to help with resource
mobilization
Bank as a Secretariat
 Bank has the requisite experience
 Additional staff will be recruited to work in the
Secretariat
Bank as one of the Implementing Entities (IE)
 The Bank will apply to the Fund, as with other
accredited entities
Compliance and Reporting


Fudiciary Standards including Audit
 AfGF fiduciary standards will be developed, including
criteria for accreditation as implementing entities
 Country systems will apply for direct access when
national entities meet basic standards
 Countries’
institutional
capacities
will
be
strengthened, where needed
 National entities borrowing from the AfGF are
responsible for carrying out an audit of their
operations
Environmental Safeguards including Gender
 A set of E&S safeguards shall be established
 The AfGF shall enhance the capacities of countries to
meet minimum safeguards standards
 Gender equality shall be part of selection criteria and
M&E system
Compliance and Reporting (cont’d)

Reporting and Disclosure of Information
 The Bank shall present to the Governing Council an
Annual Report on AfGF activities
 Information on AfGF’s operations shall be regularly
posted on the AfGF website

Monitoring and Evaluation




A M&E system shall be developed for the AfGF.
Establishment of national M&E systems to support
Direct Access operations.
An Independent Evaluation Mechanism will be
established to carry out periodic independent
evaluation of the Fund
A detailed results framework will be developed, with
key indicators and targets
Consultation Process

Planned and completed consultations:

Consult with AGN in Durban (August 2011)

Consult with African representatives in Transitional
Committee in Geneva (Sept 2011)

African Ministerial Conference of Environment (Sept
2011)

AfDB Board seminar (Jan 2012).

Donors and potential contributors to the Fund
(ongoing);


Civil Society and Private Sector;
AfGF Framework Document will continue to be revised
based on further consultation in response to post COP 17
response to emerging issues.
For tails:
Thank you
Further information:
www.afdb.org
[email protected]