Unlocking Green Financing for sustainable development in Africa

MaryAnne Musilo,

The Chatham House Africa Programme and the Pan African Climate Justice Alliance (PACJA) yesterday convened stakeholders from government, business, civil society, and the international community for a discussion on how to unlock green financing for sustainable development in Africa, and in urban centres in particular. Despite wealthy nations’ commitment to delivering $100 billion towards green financing, this money has not been delivered.

Global climate policies towards a ‘just transition’ under the Paris Agreement need to align with and support African states’ national sustainable development priorities – in particular, the need for decent and fair job creation, and the establishment of sufficient, resilient, and sustainable power supply, accessible to all, and efficient energy use.

Speaking during then event, honourable Zachary Ayieko, Chief Administrative Secretary of the Ministry of Energy of the Republic of Kenya, highlighted the importance of energy for Africa’s expanding cities.

Urbanisation is a significant economic opportunity, but cities harbour high income and energy inequalities.  Although each country’s trajectory is different, there are common interests and entry points for cooperation across African states.” He added

Other panellists and participants  emphasised the importance of human rights within climate change debates. This includes the right to energy access, the dignity of decent work, and the importance of acknowledging that the green transition must recognise worker rights  in both the formal and informal economy and along the value chain, especially in the extraction of green minerals.

The creation of decent jobs is a development priority, but delivery is not simple. There is a need to build linkages along the green value chain so that ‘green jobs’ don’t just mean short-term construction work or a small number of high-tech jobs often undertaken by expatriates, but long term secure jobs in national development priority sectors. A deeper understanding of the absorption capacity of the informal economy is also required to reach a large proportion of the workforce in Africa.

Financing this change requires decisions to be made on the scale of projects. Mega projects can benefit from economies of scale and lower marginal transaction costs in their design but carry higher risks of failure or association with rent-seeking. Small-scale, distributed projects which often carry lower financial and political risks, can lead to broader access, and can be constructed in shorter time-frames.

The deliberations concluded that greater political will is required, both on the continent and internationally, to address these issues and lead the continent towards a sustainable future.

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