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GFANZ Africa Network: The Advisory Board’s priorities and strategy for the Network

The GFANZ Africa Advisory Board convened on November 7, 2022, for its inaugural in-person meeting at COP27 in Sharm El-Sheikh, Egypt – where it approved the GFANZ Africa Network strategy and workplan, for 2023 and beyond.

The GFANZ Africa Network launched in September 2022 and seeks to unlock investment for green growth and support engagement with African financial institutions, ensuring that GFANZ’s work on supporting the global transition to net zero is inclusive and applicable to all.

The Advisory Board will drive the strategy and progress of the GFANZ Africa Network, guided by its members who include leading figures in climate, finance, development, and policy from across the continent. Chaired by Dr. Mahmoud Mohieldin, the UN Climate High Level Champion for Egypt, COP27, the Board discussed and agreed the workplan for GFANZ Africa, for 2023 and beyond, and how the Network will realize its objectives to mobilize finance for the continent.

GFANZ Co-Chair Mike Bloomberg and GFANZ Vice Chair Mary Schapiro also attended the meeting, underlining Mike Bloomberg’s earlier announcement of his commitment to support the work of the GFANZ Africa Network, including a collaboration with Bloomberg Philanthropies to support the transition to accessible, clean energy systems on the continent.

The opportunity for climate action in Africa

Delivering a Just Transition and Green Growth provides a huge opportunity to deliver affordable energy and drive economic growth and jobs. Unlocking investment in green projects at scale is needed to ensure countries in Africa can grow their economies whilst keeping emissions low. Promoting inclusive development will also be crucial to the world’s ability to meet the goals of the Paris Agreement. High untapped renewable energy potential, abundant land and essential natural resources, and the world’s youngest and fastest growing labor force make Africa a critical force to drive global climate action.

Yet more ambitious and urgent action is needed from global governments, policymakers, and finance to meet the challenge. Africa is already bearing the costs of climate change, despite contributing the least to its cause, and urgently requires action to mitigate emissions growth (such as expanding renewable energy generation capacity and access) and provide climate adaptation and resilience (such as new agricultural approaches and inputs for improved food security). Increased private investment is needed to achieve these crucial goals and deliver the continent’s Just Transition.

The GFANZ Africa Network will build on the global work of GFANZ to support the financial system’s efforts to finance the transition to net zero by applying a regional lens to address Africa-specific challenges, led by African institutions, and supported by a regional secretariat. Working with African banks, asset owners and managers, insurers, and other financial institutions, the Network will work both to bring GFANZ to Africa and Africa to GFANZ with a focus on capital mobilization. To bring GFANZ to Africa, it will support the translation and adaptation of global guidance and tools into local contexts, as well as work with key partners to provide capacity-building needed to scale climate finance for African financial institutions. To bring Africa to GFANZ, the Network will help to build the movement of net zero committed financial institutions on the continent, and ensure their expertise and perspectives are embedded in the governance and global output of GFANZ.

At its inaugural meeting, the Advisory Board discussed and approved a work program for 2023 and beyond, aimed at driving the multifaceted approach necessary to scale investment, policy, knowledge, and collaboration needed for the financial system to support Africa’s clean growth.

Addressing critical bottlenecks is the key to unlocking the continent’s green growth potential. Africa is receiving less than 12% of the financing it needs for climate action1, against a backdrop of global economic concerns around energy prices, inflation, and debt affordability. Public and private sectors, including finance, must work in partnership to address barriers and scale up climate solutions. GFANZ is supporting the development of the Just Energy Transition Partnerships (JETPs) and other country-tailored solutions such as Egypt’s Nexus on Water Food and Energy (NWFE) as part of its call for Country Platforms as a way to better deploy donor and MDB finance to crowd in high multiples of private finance to support ambitious country NDCs and pipeline projects. The approach and lessons from building these platforms can be leveraged by the Africa Network to unlock new de-risking and collaboration to support the development of projects and markets needed to protect nature and deliver a Just Transition and Green Growth across the continent.

GFANZ’s strategic priorities in Africa

The Network will take a systematic approach to undertaking the analysis, financial institution engagement and policymaker engagement needed to mobilize capital for Africa, with three overarching objectives:

  1. Building momentum on green and transition finance, and showcasing African-led climate action
  2. Supporting African financial institutions to ensure they have the tools and guidance to take advantage of the move towards net zero finance and economies
  3. Unlocking investment into African countries’ just transition and green growth

GFANZ Africa work plan for 2023 and beyond

As GFANZ Africa Network looks to 2023, it will drive four flagship initiatives to meet our strategic priorities, which will support the broader multi-stakeholder work necessary to lay the foundations for mobilizing climate finance in Africa at scale, with specific attention to attracting a greater share of international finance. Across these initiatives, GFANZ will utilize its convening power, and links with other entities with regional and global convening power to accelerate and expand its impact and reach:

  1. Support the development of project pipelines into investable opportunities: Leverage the significant knowledge and expertise of GFANZ financial institution members to provide feedback and advice on the development of transition-aligned investment proposals. By connecting African and global private finance with governments and developers of project pipelines, financial institutions can strengthen the bankability of climate projects with advice on project-specific and wider enabling environment actions needed to crowd in private investment, and the de-risking solutions needed to mobilize finance. This will help to support the creation of a pipeline of viable green opportunities for investment, ultimately aiming to pave the way to unlock more private financing for green projects in Africa2.
  2. Work to reduce the cost of climate finance in Africa by better understanding what is needed on de-risking investments to crowd in private finance: Deconstruct and develop risk mitigation mechanisms through: i) GFANZ member engagement to understand risk drivers and real vs. perceived risks which are preventing investment; ii) working with GFANZ members, policy makers and African stakeholders to co-develop risk mitigation solutions including the development of innovative financing vehicles, ultimately aiming for reduced cost of climate finance in Africa. In doing so, GFANZ can build on existing successes in de-risking in Africa – and bring these insights and practices to wider range of solutions and geographies.
  3. Contextualize GFANZ’s global tools to Africa – and incorporate African insights into GFANZ’s outputs: Optimize GFANZ’s global resources, guidance and tools for regional use and applicability while also shining a light on African case studies, success stories, perspectives and innovations which are leading the turn towards green growth, ultimately ensuring that African financial institutions have the tools and guidance to adapt to a global net zero economy while also highlighting African-led climate action.
  4. Drive interventions to maximize carbon currency benefits to Africa: Africa has natural carbon sinks and low carbon emissions and requires increased investment to maintain both. However, it plays a disproportionately small role in the global carbon market. GFANZ will leverage its Networks and other stakeholders (engaged in carbon exchanges, brokering etc.) to help shape innovations that will allow Africa to monetize its climate achievements in the carbon market. GFANZ will also act as a ‘center of excellence’ to support governments and other relevant stakeholders in the design and implementation of smart regulation and tools, ultimately aiming for an improved enabling environment for carbon markets in Africa and the creation of a pipeline of mature and viable carbon credit products for investment.

1 CPI (June 2022), Climate Finance Needs of African Countries

2 For the avoidance of doubt, financing opportunities related to any specific projects considered will be competitively tendered in the usual manner and open to all financial institutions. Participation (or otherwise) in the GFANZ Africa Advisory Board will not be a relevant factor in such tender process.

The GFANZ Africa Advisory Board members

  • Dr. Mahmoud Mohieldin, UN High-Level Climate Action Champion of Egypt, COP27, (Chair)
  • Dr. Mohamed Farid Saleh, Chair of the Egyptian Financial Regulatory Authority (Vice Chair)
  • Hussein Abaza, CEO, CIB
  • Ade Ayeyemi, CEO, Ecobank
  • Akim Daouda, CEO, FGIS Gabon Sovereign Wealth Fund
  • Hendrik du Toit, CEO, Ninety One
  • Dr. Leila Fourie, CEO, Johannesburg Stock Exchange
  • Dr. Frannie Léautier, CEO, South Bridge Investments
  • Tariye Gbadegesin, CEO, ARM Harith Infrastructure Fund Managers
  • Ms. Nezha Hayat, Chairperson and CEO, Moroccan Capital Market Authority
  • James Irungu Mwangi, Executive Director, Dalberg and Founder, Climate Action Platform for Africa
  • Mark Napier, CEO, FSD Africa
  • Lesley Ndlovu, CEO, African Risk Capacity
  • Arunma Oteh, Chairperson, Royal African Society
  • Dr. Vera Songwe, Co-Chair of the High Level Expert Panel Group on Climate Finance