NDF - Financing for climate change and development projects

NDF teams up with ECA, AUC, World Bank and AfDB to operationalise AFRI-RES

Photo: NDF
Bridge construction. The planned lifetime of a new bridge will often be 50 years or more.
Photo: NDF
Bridge across the Limpopo river in Mozambique
Photo: ANE, Mozambique
Bridge collapse during floods in Mozambique 2013

Addis Ababa. 28 April, 2017 (ECA). AFRI-RES, a unique facility to support climate proofing Africa’s long-lived infrastructure investments, was given significant impetus with the formal approval of funding of 5 million Euros by the Nordic Development Fund (NDF) for its programme activities.

Nordic Development Fund teams up with ECA, AUC, World Bank and AfDB to operationalize AFRI-RES, a unique facility for enhancing the climate resilience of investments in Africa’s long-lived infrastructure

AFRI-RES, an Africa-based facility, is aimed at strengthening the capacity of governments and institutions including river basin authorities, Regional Economic Communities and power pools as well as the private sector to plan, design, and implement infrastructure investments that are resilient to climate variability and change.

Conceived as a partnership between the World Bank, the Economic Commission for Africa (ECA), the African Development Bank and the African Union Commission (AUC), AFRI-RES will systematically promote the integration of  climate change considerations into the planning and design of long-lived infrastructure investments in Africa such as in the implementation of the continent’s Programme for Infrastructure Development (PIDA) and other regional, sub-regional or national programmes of strategic relevance.

The infrastructure projects identified in PIDA require investments in the order of USD 360 billion by 2040, with approximately USD 70 billion needed by 2020.  According to the World Bank’s 2010 Africa Infrastructure Country Diagnostic report the cost of meeting Africa’s infrastructure deficit is around USD 93 billion per year, including about USD 30 billion for maintenance. Most of these investments will be in support of long-lived infrastructure in sectors that are very sensitive to climate change and variability such as energy, water, transport and agriculture.

The Afri-Res was presented in the plenary of the African Union Specialized Technical Committee (STC) on Transport, Transcontinental and Interregional Infrastructure, Energy and Tourism that held in Lome, Togo 13 – 17 March, 2017. The Facility was well received by the STC and included in its declaration. The declaration urged Member States to elevate the importance of mainstreaming climate change into infrastructure planning and implementation in efforts to close the huge infrastructure deficit on the continent and to scale up investments in climate information and services for development planning.

A central function of AFRI-RES is to facilitate interaction between policy makers, financiers, project developers, and scientific and engineering experts in order to develop and mainstream new practices that deliver climate resilient infrastructure in Africa. The scope of the work of the facility will thus span different sectors and different stages of the planning and project development process.

Mr. Abdalla Hamdok, Acting ECA Executive Secretary, said “Fit-for-purpose infrastructure is essential for the socio-economic transformation of African economies and attaining regional integration. With a huge infrastructure deficit, Africa has the opportunity to adopt a new climate economy approach to meeting its development agenda, supported by quality infrastructure that is resource efficient, safe, resilient to climate change and uncertainty, as well as being transformational. AFRI-RES will assist Member States in this direction. The ECA welcomes this strong show of support for the facility by the Nordic Development Fund. The support comes at a time when the ECA is repositioning its African Climate Policy Centre as the knowledge centre for climate resilient development policies in support of Africa’s new development paradigm as framed by the UN 2030 Agenda for Sustainable Development and the continent’s Agenda 2063, recognizing that climate change and development are two sides of the same coin”.

Ms. Fatima Denton, ECA Special Initiatives Division Director where the AFRI-RES Secretariat will be located in the African Climate Policy Center said “There is currently no single initiative such as AFRI-RES to harmonize projections of future climate in Africa, and even more importantly, to convert that information into practical applications”. Ms Denton said “with time, AFRI-RES will catalyse a paradigm shift towards a climate-resilient green economy approach to planning development investments on the continent.”

AFRI-RES will help ensure that climate resilient investment practices are adopted by different financiers active in Africa, thereby boosting the share of overall development financing for Africa with resilience co-benefits.

AFRI-RES will provide project-level technical assistance for climate resilience assessments in pre-feasibility or feasibility studies, climate risk management actions in the structuring of public-private partnership agreements or contracts. Mr Makhtar Diop, the World Bank's Vice President for Africa praised the NDF for prioritising and supporting investments in climate-resilient infrastructure. He said “Climate variability and change are jeopardizing Africa’s hard-won development achievements and its aspirations for further growth and poverty reduction. We thank NDF for their generous support of AFRI-RES, which is a key component of the World Bank’s $19 billion Africa Climate Business Plan to strengthen, power, and enable the continent’s resilience; and look forward to working with UNECA, AUC and other partners such as the African Development Bank on the implementation of the initiative. AFRI-RES will deliver near-term benefits to improve the design of critical infrastructure projects under development now, while strengthening long-term capacity of Africa’s decision-makers to plan and design investments in a climate-resilient way.

Mr Amadou Hott, Vice-President, Power, Energy, Climate and Green Growth at the African Development Bank said “NDF has explicitly demonstrated by this support that it shares in Africa’s vision to scale up adaptation finance. Adaptation finance has significantly lagged mitigation finance particularly in Africa. Without proactive focus on climate resilient infrastructure, adaptation finance in Africa will continue to be predominantly small-scale adaptation projects. Climate resilient infrastructure is well aligned with the AfDB’s transformation agenda for Africa. Achieving the Hi-5s (1. Light up and Power Africa, 2. Integrate Africa, 3. Industrialize Africa, 4. Feed Africa and 5. Improve the quality of life for Africans) will all entail mainstreaming climate resilient measures in the relevant policies, programs, projects and operational activities

The Nordic Development Fund is the joint development finance institution of the five Nordic countries. The objective of NDF's operations is to facilitate climate change investments in low-income countries. Mr Aage Jørgensen, Country Program Manager and AFRI-RES Project Manager at NDF said “The AFRI-RES will adopt the results and methods developed in an earlier World Bank and ECA project; move them forward in practical and relevant ways so they can be used to assist African governments, planners and private developers to integrate climate change in project planning and design. The AFRI-RES Facility will be closely linked to the ClimDev Africa program also supported by NDF. The AFRI-RES will complement ClimDev by focusing on a longer time horizon (e.g., the life span of long-lived investments such as power station, reservoirs, etc.) and develop an integrated approach to decision-making, going from climate projections, to assessment of impacts, to planning and design of options aimed at minimising negative impacts. The AFRI-RES Facility will also look at taking advantage of potential opportunities for improved investment performance under climate change.”

Changes in the practice toward climate-resilient investment planning will also be encouraged through awareness-raising (e.g. workshops, seminars) intended to enhance understanding of public and private sector decision-makers as to the risks of climate variability and change on the performance of infrastructure, to more in-depth technical workshops to support robust decision-making, access to finance, technology transfer and capacity building, reflecting the real-life experiences.

Good practices will be identified and guidelines developed to inform decision-making on incorporating climate risk into infrastructure planning and design across different sectors and stages of decision-making as well as develop and maintain an online repository of climate data, tools and climate information services of relevance for climate resilient investment planning and design in Africa. This will include a library of project-level experiences, including validated climate data, models and scenarios for Africa, as well as analytics and learning and knowledge products to support climate resilient infrastructure investment.

More information

Africa Climate Resilient Investment Facility (AFRI-RES) [NDF C91]