African nations call for more climate financing before start of Cop27 summit

Ministers say the continent benefits from less than 5.5% of environment funding despite having a low carbon footprint

Solar cells on the roof of a hotel in Sharm El Sheikh, which is hosting the Cop27 climate change summit in November. Reuters
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African ministers who met in Cairo two months before the start of the Cop27 climate summit have called for a sharp expansion of climate financing for their continent while pushing back against an abrupt move away from fossil fuels.

Egypt, an oil and gas producer considered highly vulnerable to climate change, has positioned itself as a champion for African interests as it prepares to host the summit in Sharm El Sheikh in November.

A communique released on Friday — after a three-day forum for finance, economy and environment ministers — said Africa benefitted from less than 5.5 per cent of global climate financing despite having a low carbon footprint and suffering disproportionately from climate change.

It urged rich countries to meet and expand climate pledges, and said poor countries should be able to develop economically while receiving more funds to adapt to the impact of climate change.

The document stressed “the need to avoid approaches that encourage abrupt disinvestments from fossil fuels, as this will … threaten Africa's development”.

The role of gas in the transition to cleaner energy is set to be a key point of contention at Cop27. Climate activists want it to be quickly phased out and replaced with renewables.

Nigerian Finance Minister Zainab Ahmed told the Cairo forum that gas was a matter of survival for her country.

“If we are not getting reasonably priced finance to develop gas, we are denying the citizens in our countries the opportunities to attain basic development,” she said.

The communique also called for efforts to focus on climate change in a review of multilateral development banks and international financial institutions.

It suggested the creation of a sustainable sovereign debt centre that could reduce the cost of capital for developing states and support debt-for-nature swaps.

Experts have said there is private and public sector appetite for financing and investing in climate projects in Africa, but funding is affected by reasons such as risk perception, underdeveloped green finance markets and local technical and policy constraints.

States have reported an increase in the cost of borrowing rise due to the Covid-19 pandemic and the war in Ukraine.

“This is keeping us up at night — how to decrease the cost of borrowing,” Egypt's Deputy Finance Minister Sherine El Sharkawy told the forum.

Kevin Chika Urama, chief economist at the African Development Bank, said Africa faced a climate financing gap of about $108 billion each year.

“Climate finance structure today is actually biased against climate-vulnerable countries. The more vulnerable you are, the less climate finance you receive,” he said.

Updated: September 10, 2022, 12:55 PM
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