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Africa Moyo Deputy News Editor

SUSTAINABLE green financing is an important component of green industrialisation that presents an opportunity for developing countries to leapfrog to higher levels of development through moving to low-carbon and resource-efficient economies, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube has said.

He said this in an article published by CNBC Africa yesterday.

His remarks come as Zimbabwe prepares to host the 56th Session of the Economic Commission for Africa (ECA) Conference of African Ministers of Finance, Planning and Economic Development in Victoria Falls from February 28 to March 5.

President Mnangagwa is expected to officially open the conference, which will run under the theme: “Financing the transition to inclusive green economies in Africa: Imperative, opportunities and policy options”.

The theme is seen as aptly capturing the challenges facing the continent in terms of accessing adequate and timely resources to finance the transition towards the green economy and the negative impacts on economies arising from climate change, pandemics, growing debt levels and conflicts, among others.

The impact of climate change is largely felt in countries that don’t pollute the environment the most such as Zimbabwe and other developing countries.

Africa’s carbon footprint is considerably small compared to other regions, with the 2020 continental greenhouse gas emissions standing at about 1,5 billion tonnes of carbon dioxide (CO2) equivalent, representing about 3 percent of global emissions.

Prof Ncube said by evolving to low-carbon economies, there will be a growing demand for green technologies and services, thus developing countries stand to benefit from this transition by developing new industries and creating new jobs.

“Green industrialisation can help reduce poverty and inequality by providing access to clean energy, clean water and other basic services in a way enhancing prospects of shaping a world that is sustainable, inclusive and prosperous for all,” he said.

Prof Ncube Africa requires about US$52,7 billion annually to advance climate action, yet current annual spending on adaptation is just around US$11,4 billion.

Nearly all developing country parties lack adequate financial resources to accelerate their low-carbon and climate-resilient developmental actions, observed Prof Ncube.

“This is mostly due to their low per capita income, unstable economies, constrained fiscal space, lack of institutional capacity and structural weaknesses which militate against the desired forward thrust towards a resilient and green growth pathway, thus depriving the potential to harness the powerful synergies between adaptation, growth and development.

“The protracted debates around climate financing at the annual COP meetings under the auspices of the UNFCCC (United Nations Framework Convention on Climate Change), the non-fulfilment of pledges made by developed country parties as well as impediments around access to the available climate finance, all point to the dire need for a paradigm shift in approach by spurring proactiveness among developing countries to combat the effects of climate change.

“This entails leveraging innovative financing instruments to crowd in private climate financing in Africa (blended finance). Africa’s private investors ought to recognise that climate financing is not only an environmental issue, but is also a developmental issue that embraces economic and social transformation in the quest for sustainable development. Therefore, climate-allied financial instruments guarantee returns on the investor as well as on the continent,” he said.

Green climate financing has been on a rise in Africa in recent years, with the goal of supporting projects that help reduce emissions, increase resilience to climate change, and improve livelihoods.

For instance, the African Development Bank’s Climate Action Plant and the Green Climate Fund (GCF) financed the “Accelerating Renewable Energy Integration and Sustainable Energy (AREISE)” project in Kenya.

Prof Ncube said the success of Africa’s Green Transition process was anchored on the combined efforts of the public and private sectors, with a strong collaboration with international development partners towards mobilising the required climate financial resources ensuring that all investments were environmentally sustainable, while delivering the desired economic and social benefits for all.

He said an assortment of innovative mechanisms could help increase sustainable green financing in Africa and typical examples include; use of blended finance that combines public and private financing to support projects that have both social and environmental benefits, climate bonds that can be used to finance projects that reduce greenhouse gas emissions or increase resilience to climate change, equity financing that can be used to fund green initiatives such as renewable energy projects, sustainable agriculture, and energy efficiency improvements.

Other mechanisms include the establishment of financial institutions that exclusively invest in green projects which are commonly referred to as green banks and carbon pricing mechanisms such as emissions trading systems or carbon taxes that could be used to raise revenue for sustainable development.

Prof Ncube said recent efforts to develop regional carbon markets such as the African Carbon Markets Initiative (ACMI) could help to address the present challenges affecting carbon trading on the African continent.

“In addition, Africa’s abundant renewable energy resources could make it a net exporter of carbon credits, providing a steady stream of revenue for sustainable development projects.

“Zimbabwe has made strides in developing a regulatory framework for carbon trading, administered through the Ministry of Environment, Climate and Wildlife, which is beginning to bear fruits as many stakeholders have expressed interest to participate in the carbon markets,” he said.