The announcement, made by the World Bank on the sidelines of the UN climate meeting taking place in Barcelona, will bring music to the ears of the millions of Africans suffering from climatic changes. The decision made by the trustees of the Climate Investment Funds (CIF), will commit $1.1 billion dollars to six African nations. The choice of benefiting countries illustrates both Africa’s opportunity and potential international competitiveness within the emerging low-carbon economy but also its extreme vulnerability and limited adaptive capacity to the implications of climate change.
The six nations will receive the money in a combination of grants or low-interest loans from the CIF which was launched in 2008, and has pledges of over $6 billion dollars to date. The CIF is a collaboration of public development financiers and is run jointly by the European Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank and the International Finance Corporation and World Bank.
Leading Africa’s position in renewable energy and energy efficiency investments, South Africa will receive US$500 million which will be channelled into helping the country achieve its ambitious target of 4% renewable energy generation by 2013. The money will be instrumental if South Africa is to achieve the target of a 12% increase in energy efficiency by 2015, a difficult task considering its dependence on coal. Another large benefactor, Egypt, which is set to get $300 million dollars will also utilise the money to improve its power sector and the urban transport system in Cairo which is grossly under prepared to serve one of the world’s largest cities of over 17 million people.
A promising development for climate investment and possible innovation in low carbon growth is the pledge of US$150 million to Morocco for a fund dedicated to low carbon growth. The fund will also boost energy security, a development which is likely to be viewed with keen interest from investors in the DesertTec Foundation.
The climate finance will not all be focused on large scale infrastructure, with some of the money for South Africa dedicated to the distribution of solar water heating to millions of households, especially those with no access to electricity and in remote rural locations.
The CIF also earmarked between US$60 million and US$70 million for individual grants to Mozambique, Niger and Zambia which the World Bank felt all ‘shared dramatic risks in potential loss of land, life and livelihoods as a result of climate change’. These countries will utilise the money to pilot an initiative aimed at creating ‘resilience strategies’ against the impacts of climate change.