African nations push for more climate finance ahead of COP

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CAIRO (Reuters) – African ministers meeting in Cairo two months before the COP27 climate summit called on Friday for a big expansion of climate finance for their continent while opposing a savage shift away from fossil fuels.

Egypt, an oil and gas producer considered highly vulnerable to climate change, has positioned itself as a champion of African interests as it prepares to host the Sharm el-Sheikh summit in November.

A statement released after a three-day forum for finance, economy and environment ministers said Africa received less than 5.5% of global climate finance despite low carbon footprint and suffered disproportionately from climate change.

He urged rich countries to meet and expand climate commitments, and said poor countries should be able to grow economically while receiving more funds to adapt to the impact of climate change.

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The paper stresses “the need to avoid approaches that encourage abrupt divestments from fossil fuels, as this will threaten Africa’s development.”

The role of gas in the transition to cleaner energy is expected to be a key point of contention at COP27. Climate activists say it must be phased out quickly and replaced with renewable energy.

Nigerian Finance Minister Zainab Ahmed told the Cairo forum that gas was a matter of survival for her country.

“If we don’t get reasonably priced finance to develop gas, we are denying the citizens of our countries the opportunities to achieve grassroots development,” she said.

The statement also called for a focus on climate change in a review of multilateral development banks and international financial institutions.

He suggested the creation of a sustainable sovereign debt center that could reduce the cost of capital for developing states and support debt-for-nature swaps.

Experts say there is a private and public sector appetite for financing and investing in climate projects in Africa, but financing is hampered for reasons such as risk perception, underdevelopment of green finance markets and local technical and political constraints.

States have seen their cost of borrowing increase due to the COVID-19 pandemic and the war in Ukraine.

“It keeps us up at night – how to reduce the cost of borrowing,” Egypt’s Deputy Finance Minister Sherine El Sharkawy told the forum.

Kevin Chika Urama, chief economist at the African Development Bank, said Africa faces a climate finance gap of about $108 billion every year.

“The structure of climate finance today is actually skewed against climate-vulnerable countries. The more vulnerable you are, the less climate finance you receive,” he said.

(Reporting by Aidan Lewis, editing by Rosalba O’Brien)

Copyright 2022 Thomson Reuters.

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