Climate summit in Africa ends with call for investment – 09/08/2023 – Environment

Heads of state from across Africa on Wednesday concluded an inaugural climate summit in Nairobi, the Kenyan capital, issuing a declaration calling for an urgent restructuring of the way richer nations relate to the continent.

The declaration stressed again and again that, rather than being an unfortunate victim, Africa is poised to lead the way in clean energy and environmental stewardship.

But for that to happen, the statement states, the world’s industrialized countries, which are largely responsible for the pollution that is causing climate change, must first unlock access to their wealth through investment, rather than relegate their contributions to help when disasters occur.

This lack of funding is one of the biggest issues dividing rich and poor nations as the world struggles to reduce carbon dioxide emissions. It will be one of the main points of contention at COP28, the UN global climate summit that will begin on November 30 in Dubai, United Arab Emirates. The historic meeting in Nairobi was, in part, an effort by poorer countries to amplify their argument.

At the event, investors announced that around US$ 23 billion will be earmarked for projects that include solar microgrids, carbon markets and reforestation. But it was unclear how much of that money represented commitments, not intentions.

Kenyan President William Ruto, who served as host and master of ceremonies for the summit, said Africa has 60% of the world’s renewable energy potential and almost a third of the minerals crucial to electrifying industries currently dependent on fossil fuels, which heat the world. planet. Meanwhile, 600 million people in Africa have little or no access to electricity.

“We must go green quickly, before we industrialize, not the other way around,” Ruto said.

Multinational lending institutions have long considered many African countries too risky for investments in infrastructure such as renewable energy, due to concerns over economic mismanagement and high debt burdens, along with issues such as corruption and conflict.

The document, called the Nairobi Declaration, says it will serve as a “baseline for Africa’s common position” ahead of climate talks in Dubai later this year.

The summit attracted tens of thousands of delegates from around the world to the East African commercial hub. Its events, which took place at the Kenyatta International Convention Centre, central Nairobi’s most iconic building, an Afro-modernist skyscraper built in the 1970s, had the feel of a trade fair, except the main audience were banks, private equity firms, philanthropic institutions and donor governments.

These potential investors, especially Western ones, were asked to put their money where their mouth is.

Despite pledges made in the past to invest more than $100 billion in climate-related finance in less developed countries, the rich world has fallen far short of these targets while investing billions of dollars in renewable energy in their own countries.

“An injustice burns at the heart of the climate crisis, and its flame is burning hopes and possibilities here in Africa,” said UN Secretary-General António Guterres, who was one of many international dignitaries in attendance.

The tension underlying the summit was clear from several speeches in which African leaders lamented the lack of urgency in fulfilling funding pledges.

The United Arab Emirates, one of the world’s top oil producers and host of the annual UN climate conference this year, has made some of the biggest commitments, including $4.5 billion for clean energy and $450 million in climate credits. carbon, although the latter’s fine print indicates that it was a “non-binding letter of intent”. The UAE seeks to recast itself as a renewable energy superpower.

Some African countries have long depended on renewable energy for most of their energy production. In Kenya, Ruto said, more than 90% of electricity is renewable, much of it coming from geothermal sources in the Great Rift Valley.

But outside the halls of the convention center Kenyans were asking harder questions about who the conference and its lofty goals really served.

“The energy debate masks our economic crisis,” said Mordecai Ogada, author and leading Kenyan voice on environmental issues.

“Yes, we get most of our electricity from renewable sources. But we pay foreign companies to generate that power exorbitantly in foreign currency,” he said. “Production has become expensive, which drives inflation. As far as the lives of Kenyans are concerned, the energy source is completely immaterial.”

Kenya’s currency has lost about a third of its value against the dollar in the past two years, and Ruto has increased taxes on gas and small businesses, deepening the cost of living crisis. More than 8 in 10 Kenyans live on less than $5 a day, according to the World Bank.

At the heart of the participants’ request to the world was “concessional” finance—essentially, loans at below-market interest rates and with lenient repayment terms.

Huge amounts of concessional finance could, in the near future, come from the World Bank and the IMF (International Monetary Fund), among other major lenders, if they deliver on promised reforms in the way they assess risk and incorporate climate considerations into the structuring of their loans. .

“Eight months ago, there was still a debate on the World Bank board about whether climate investments were a trade-off for economic development,” said a senior US Treasury official who attended the summit, speaking on condition of anonymity, per protocol. of the Treasury Department.

The official said that nearly $50 billion in funding that could be earmarked for concessional financing of the United States through multilateral development banks was awaiting congressional approval. President Joe Biden has said he wants Congress to set aside more than $11 billion for climate aid, but got just $1 billion in the last budget.