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Towards the creation of the Africa Green Fund ( AfGF ). ADB Group Partnership Forum Mr. Abou Sabaa, Chairman AfDB Climate Change Coordination Committee Tunis 23 March 2012. Structure. Background Rationale The AfGF Platform The Fund Objectives Linkages with Green Climate Fund Scope - PowerPoint PPT Presentation
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ADB Group Partnership Forum
Mr. Abou Sabaa,Chairman
AfDB Climate Change Coordination Committee
Tunis
23 March 2012
Towards the creation of the Africa Green Fund (AfGF)
Structure1. Background
2. Rationale
3. The AfGF Platform
4. The Fund Objectives Linkages with Green Climate Fund Scope
5. Implementing and Financing Arrangements Eligibility and Accessibility Financing Procedures and Conditions
Structure (cont’d)6. Compliance and Reporting
8. AfDB Institutional capacity
9. Expected role of AfDB
10. Consultation Process
New and additional fast-track resources - $30 billion by 2012
Mobilizing additional $100 billion annually by 2020 to address needs of developing countries
Africa’s leadership requested climate change resources flows for Africa region to be managed by the African Development Bank.
The Africa Green Fund is a response to this request.
Background
Sub-Sahara Africa received only 12% of Bilateral Funds and just 4% of Multilateral Financing in 2009-2011
Global funds hosted, governed and administered outside Africa
Funds have cumbersome access procedures and lack balance between mitigation and adaptation
Lack of African voice in decision making and funding priorities
Africa’s priorities now relate to implementing the Rio+20 Sustainable Development Goals including transition towards Green Growth
Rationale for the Fund
AfGF Platform The African Green Fund is part of a Platform that seeks
to enhance Africa’s access to existing and new climate finance.
Enhance Access to Existing CC Instruments
Block 1 (internal
governance)
AfGF AfGF InstrumentInstrument
Block 2
Block 3 (Scaled up AfGF Instrument)
The Platform is flexible enough to grow overtime and adjust to the future climate finance architecture.
The focus on short and medium term is on Block 1 of the Platform
AfGF Platform (Block 1)Enhance Access
to Existing CC Instruments
Block 1 (internal governance)
AfDB will establish a framework to:
Streamline and harmonize existing thematic funds managed by the Bank (AWF, CBFF, SEFA, ClimDev-Africa).
Simplify operational procedures and improve access.
Create a new facility to support RMCs to transition towards Green Growth
AfGF Platform (Block 2)
AfGF AfGF InstrumentInstrument
Block 2(external
governance)
Block 2 involves creation of a new instrument which is part of long-term strategy for climate finance
AfGF could be either independent of AfDB decision-making structure or ADF type of governance structure both of which involve equitable donors and African countries.
The instrument seeks to receive, manage and deliver resources from Fast Start funds and long-term pledges under Cancun Agreements and other sources.
AfGF Platform (Block 3)
Scaled up AfGF Instrument (Block 3)
Block 3 is a scaled up Africa Green Fund.
It will seek to receive, manage and deliver funds to Africa at scale, to be designed and operationalized after establishment of the Green Climate Fund (GCF).
AfGF will seek to become one of conduits for climate finance and preferred channel over medium term.
The goal of the AfGF is to support country-owned and country-led climate compatible development in Africa Facilitate access for African Countries to existing and
Bank internal resources Promote direct and immediate access to fast-start
funds Support the development of a Low-carbon and
Climate Resilient Economy with transition towards green growth
Strengthen national institutions and support the use of country systems for direct access to the Fund
Complement other multilateral/bilateral financial mechanisms
AfGF Goal and Objectives
GCF is a global mechanism while AfGF will focus on Africa specific concerns and priorities and give greater priority to adaptation.
COP 17 in Durban adopted the establishment of the GCF. AfGF will seek to become one of the conduits for
resources from GCF without compromising access of eligible African countries to GCF.
AfGF will provide resources to build capacity and readiness to access future resources.
AfGf will also assist Bank’s RMCs to develop their Green Growth Framework
Linkages between AfGf and Green Climate Fund
Adaptation Sustainable Land & Water Management Climate Resilient development Natural Disaster management
Mitigation Renewable Energy and Energy Efficiency Sustainable Transport Sustainable land and Forestry
Cross-Cutting Assist with state of readiness and preparatory
phase and Capacity building Transition towards Green Growth Technology development and transfer; capacity
building Collaboration with UNFCCC, UNCBD and UNCSD
Scope of the Fund
Access:
African Countries through Direct Access
African Regional Organizations
Recognized public and private enterprises in RMCs
AfDB, other MDBs and International Organizations operating in Africa
Eligibility criteria:
Development Impact, Potential scale up for adaptation and low carbon, cost effectiveness and demonstration potential, national priorities
Implementing and financing arrangements
Implementing and financing arrangements Financing procedures An accredited Implementing Entity (IE) shall submit a
Request for Funding to the Secretariat, following some requirements : Each operation will be approved and administered in
accordance with the applicable guidelines of the concerned accredited Implementing Entity;
The accredited Implementing Entity will conclude an agreement with the beneficiary, expressing the terms of financing and acknowledging the source of finance;
Eligible expenditures under individual financing will be determined in accordance with the policies and procedures of the respective accredited Implementing Entity.
Each IE will apply its own appropriate procedures in developing operations.
Instruments include concessional and non-concessional lending, grants, guarantees and equity Grants for Adaptation activities and Capacity
development Concessional for investments to support low-carbon
economic development that have internal rates of return just above the normal market threshold
Gurantees for credit, regulatory or technology risk
Details will be provided in the Operations Manual of the Fund.
Financing Instruments
AfDB institutional capacity
Bank’s total lending volume for 2008-2010 was US$ 24.8 billion from its own resources; cumulative approvals from 1967-2010 amounted to US$ 89.6 Billion; cumulative disbursement of US$34.1 Billion.
The Bank is also managing US$ 5.46 billion on behalf of over 50 funds
The Bank will put its experience to provide technical and advisory support to the AfGF
Bank as a Trustee Bank has experience being a trustee of climate
change funds (NEPAD, CBFF, ClimDev, etc.) and hosting several bilateral trust funds
Bank’s responsibilities as trustee shall include fund management, financial reporting and the execution of legal agreements.
Additional staff will be recruited to help with resource mobilization
Bank as a Secretariat Bank has the requisite experience Additional staff will be recruited to work in the
Secretariat Bank as one of the Implementing Entities (IE)
The Bank will apply to the Fund, as with other accredited entities
Expected Role of the AfDB
Fudiciary Standards including Audit AfGF fiduciary standards will be developed, including
criteria for accreditation as implementing entities Country systems will apply for direct access when
national entities meet basic standards Countries’ institutional capacities will be
strengthened, where needed National entities borrowing from the AfGF are
responsible for carrying out an audit of their operations
Environmental Safeguards including Gender A set of E&S safeguards shall be established The AfGF shall enhance the capacities of countries to
meet minimum safeguards standards Gender equality shall be part of selection criteria and
M&E system
Compliance and Reporting
Compliance and Reporting (cont’d) Reporting and Disclosure of Information The Bank shall present to the Governing Council an
Annual Report on AfGF activities Information on AfGF’s operations shall be regularly
posted on the AfGF website Monitoring and Evaluation A M&E system shall be developed for the AfGF. Establishment of national M&E systems to support
Direct Access operations. An Independent Evaluation Mechanism will be
established to carry out periodic independent evaluation of the Fund
A detailed results framework will be developed, with key indicators and targets
Consultation Process Planned and completed consultations:
Consult with AGN in Durban (August 2011) Consult with African representatives in Transitional
Committee in Geneva (Sept 2011) African Ministerial Conference of Environment (Sept
2011) AfDB Board seminar (Jan 2012). Donors and potential contributors to the Fund
(ongoing); Civil Society and Private Sector;
AfGF Framework Document will continue to be revised based on further consultation in response to post COP 17 response to emerging issues.