Africa is preparing to submit its Nationally Determined Contributions (NDCs) by February 10, 2025, with an end date of 2035. These contributions are part of the Paris Agreement and outline each country’s plan to reduce greenhouse gas emissions.
According to the report, African economies have shown resilience in adapting to climate change and the COVID-19 pandemic. However, they still face challenges in developing NDCs that are ambitious and achievable.
African countries need to mobilize a significant amount of money for their NDC projects by 2030. This will require significant investment from both public and private sectors. A model law has been proposed to mobilize private capital at scale and speed for the delivery of NDC projects.
Investors are increasingly taking a coherent approach to address environment-related financial risks in their portfolios. This includes both climate and nature, and seizing the growing opportunities associated with sustainable development. They recognize the importance of water investment initiatives in Africa.
Private finance has a critical role to play in supporting the implementation of ambitious climate goals. Over 500 institutional investors have recognized the need to accelerate the net zero transition. They hold significant pools of capital, which are critical to tap into, if we are to close the African climate finance gap.
Global warming is the largest threat to humanity and a major driver of poverty and inequality, conflicts, and violence. Nowhere is this more true than in Africa, which is at the epicenter of the climate crisis. Although the continent contributed the least to global warming, it is most vulnerable to its effects.
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Considerations for informing, implementing, and investing in the next NDCs are essential. Under the Paris Agreement, Parties are to put forward their next NDCs in February 2025. The United Arab Emirates has recognized the urgency of the climate crisis and has submitted its Third Nationally Determined Contribution (NDC 3.0), accelerating action towards mission 1.5C.
As countries start developing their new NDCs, they will need to draw on several years of experience in their formulation and implementation. They will also need to address the challenges in developing NDCs that are not only ambitious but also achievable. The energy sector needs significant investment to support the implementation of NDCs.
In the middle of this effort, it’s worth noting that past experiences have shown that a coordinated approach is necessary to achieve significant reductions in greenhouse gas emissions. The use of financial instruments can help mobilize the necessary capital for NDC projects.
Africa needs to mobilise $3trn for its Nationally Determined Contribution (NDC) projects by 2030. Compared to industrialised nations, African countries emit far less greenhouse gases, with CO2 emissions per capita more than 10 times lower than those of North Americans.
As the continent moves forward with its NDCs, it will be essential to ensure that the necessary financing is in place to support the implementation of these projects. This will require a coordinated effort from governments, international organizations, and the private sector. African and global institutional investors hold significant pools of capital, which are critical to tap into, if we are to close the African $3trn climate finance gap.
