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AfDB dumps coal, retains gas in US$25 billion Climate Change mitigation plan

The Africa Development Bank (AfDB), a key funder of Africa’s infrastructural expansion, is building a 25 billion US dollar war chest to fund climate change mitigation efforts, including financing for food production. While refusing to fund coal extraction, however, the bank will continue to fund gas as Africa’s “just transition” becomes a battleground between those calling for cheaper, green, renewables and those insisting on utilising vast untapped gas reserves – a more expensive option for both in terms of production and the climate, according to new reports.

By Zubaida Mabuno Ismail, bird story agency

The African Development Bank plans to commit some 25 billion US dollars (US$) to programmes to mitigate the impact of Climate Change – among them, clean energy and emergency food production – over the next three years.

This is just a fraction of the estimated amount – between US$1.3 trillion and US$1.6 trillion – that the continent requires to tackle the threat by 2030.

Speaking at the 57th Annual Meeting of the bank in the Ghanaian capital, Accra, the bank’s president, Akinwumi Adesina, said Africa needs more resources to combat the effects of climate change, which could imperil most of the big socio-economic strides and infrastructural developments the continent has made in the last two decades.

The meeting brought together some 3,000 delegates, including the board of directors of the AfDB, regional representatives from the six economic blocs and finance ministers across 54 states,

On energy, he said the bank would channel most resources to harnessing clean energy but warned that what the bank was committing was a drop in the ocean.

“Africa receives only 3 per cent of overall global climate money,” he said.

In response to the financial needs of climate change mitigation efforts, especially in the energy sector, the bank is set to establish the African Just Energy Transition Facility, which will be used to support African countries to transition from heavy fuel oil and coal power plants to renewable energy baseload power systems.

“It should be noted that even if Africa triples the use of gas for gas-to-power it will contribute less than 0.67 per cent to global carbon emissions. So, just energy transition must not short-change Africa’s growth and development, especially stable energy to power its industrialisation.”

“A just energy transition is a negotiated vision and process centred on dialogue with guiding principles, to change practices in energy production and consumption. It entails improvement in technology, use of renewable energy as well as societal and institutional change which requires actors to take on new roles,” he said.

While the continent accounts for just 4 per cent of global greenhouse gas emissions, the 2018 assessment of the Intergovernmental Panel on Climate Change (IPCC) underlined “the dire repercussions of a temperature rise of more than 1.5°C, particularly for Africa.”

In the 2015 Paris Agreement (COP21), 196 countries ratified the agreement on climate change, which came into force on November 4, 2106. Countries agreed to keep global average temperature increases well below 2°C above pre-industrial levels and to pursue efforts to keep temperature increases to 1.5°C above pre-industrial levels. In their Nationally Determined Contributions (NDCs), African countries stated ambitions to construct climate-resilient and low-carbon economies.

Almost all African countries signed and ratified the Paris Agreement. Many of the commitments, however, are contingent on receiving appropriate financial, technical, and capacity-building assistance.

However, while committing to end coal financing, the bank reiterated its commitment to financing gas.

A scramble for gas resources following Russia’s invasion of Ukraine and the subsequent spike in gas prices has seen African governments push to ensure that gas is excluded from efforts to limit carbon-based fuels, as part of calls for a “just transition”. The continent has seen substantial discoveries of gas in the past few years, while countries like Nigeria have had vast underutilised reserves available for decades. But while gas is often regarded as a “cleaner” option than coal or oil, the impact of “escaped” gas is only just beginning to be recognised. Gas is mostly methane which over a 20-year period is, according to a 2018 Factcheck article, 84 times more potent as a greenhouse gas than carbon dioxide. Vast plumes of the gas are being discovered over many gas-producing facilities, worldwide.

“Contrary to gas proponents’ suggestion that gas is cleaner than coal, methane — which escapes into the atmosphere at the different levels in the supply chain — has far greater potential for global warming than the carbon dioxide emitted through the burning of coal,” said Avena Jacklin, climate and energy justice campaign manager at groundWork, as reported in South African publication Daily Maverick.

“In addition, the plummeting prices of renewable energy and the high price of gas means that gas is no longer a viable investment, and any gas infrastructure risks becoming a stranded asset.

“Relying on gas puts our energy supply at risk,” Jacklin said. groundWork is one of a group of organisations that have launched a court action challenging environmental authorisation for a gas-to-power plant at South Africa’s Richards Bay.

The bank has an ongoing energy transition support project with the Government of South Africa.

“The bank is currently working with the government of South Africa in support of its efforts for a just energy transition. We are also working with the G7 countries to leverage their 8.5 billion dollar financing for South Africa. Our approach will allow South Africa to raise 27 billion dollars in support of its just energy transition plans,” Adesina said.

“As we look at energy transition, we must ensure three imperatives. First, we must ensure access and affordability of electricity. Second, there must be security of supply. Third, gas must remain a critical part of the energy mix for Africa. Even if Sub-Saharan Africa triples its use of gas for energy, it will only contribute less than 0.67% to global carbon emissions. Progress will depend on developed economies fulfilling their commitment to provide at least 100 billion dollars in climate finance annually to developing countries. We must ensure that promises made at COP 26 in Glasgow must now be delivered at COP 27 in Sharm El Sheikh,” Adesina said.

The bank has already committed to financing renewable energy, financing the largest concentrated solar power plant in the world, the Noor Ouarzazate, in Morocco, as well as one of Africa’s largest wind power projects, at Lake Turkana in Kenya.

“The bank is presently spending 20 billion dollars in the Sahel’s Desert-to-Power Programme, which will create 10,000 megawatts of solar power systems, providing electricity to 250 million people and transforming Africa’s Sahel into the world’s largest solar zone,” the development bank president said.

To tackle the rising food insecurity concerns, especially in the wake of the Russian-Ukraine war, the bank will also follow through with its support for increased agricultural production.

Together with the African Union Commission, it has developed a US$1.5 billion Africa Emergency Food Production Plan for countries to boost output.

The plan, which will deliver climate-resilient agricultural technologies to 20 million farmers, aims to produce 38 million tons of food, including wheat, maize, rice, and soybeans. The total value of the additional food production is US$ 12 billion.

“I am delighted that the Board of Directors of the African Development Bank approved the $1.5 billion African Emergency Food Production Facility last Friday, May 20, 2022,” Adesina said.

Alongside the meeting, climate change and civil society activists from 11 countries called for an end to funding of some infrastructural projects that might escalate the effects of climate change.

In a statement, the group – made up of members of the #Dev4Africa campaign – urged the bank to endorse more open approaches in its operations and to effectively engage with and learn from the expertise of right-holders in Africa.

Civil society organisations have called for the bank to use the opportunity of the review to strengthen the environmental and social protections and expand coverage of the ISS to be more inclusive of marginalised groups.

“Transparency and participation are among the greatest shortcomings in AfDB’s governance, and the 2022 annual meeting, unfortunately, demonstrates the failure to prioritise engagement with civil society and communities. We are so concerned that there is no space for civil society in the official program.” said Aly Marie Sagne, Founder and Executive Director, Lumìere Synergie pour le Développement, Sénégal.

Source: Bird Story Agency | Ghana.

(Story references: https://www.factcheck.org/2018/09/how-potent-is-methane/ , https://www.dailymaverick.co.za/article/2022-05-23-environmental-groups-launch-legal-review-of-go-ahead-for-phinda-gas-to-power-plant-in-richards-bay/)

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