By BUUMBA CHIMBULU
PUBLIC actors need to improve policy frameworks and deploy concessional financing to target investment barriers for the private sector interested in climate financing.
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This is according to Green Economy and Environment Minister, Collins Nzovu, who admitted the importance of the private sector in climate change investments and financing.
Mr Nzovu said the private sector had significant potential to meet Africa’s climate finance needs through the Nationally Determined Contributions.
He said this a speech by Zambia’s Ambassador to Ethiopia, Rose Sakala, during the Ministerial Dialogue on Climate Finance in Addis Ababa, Ethiopia recently.
“The private sector has significant potential to meet Africa’s climate finance needs through the NDC. Some private investment can come from existing flows towards climate action.
“To mobilise private finance, public actors need to improve policy frameworks and investments environment and deploy concessional financing to target investment barriers,” Mr Nzovu said.
He pointed out that different types of investors could be tapped, citing that African pension funds had US$700 billion in assets under management and that sovereign wealth funds had US$16.4 billion in assets under management.
He noted that Africa faced a difficult trade-off between prioritising its sustainable development and its efforts to meet climate obligations including the requirements under the Paris Agreement.
“The continent’s capacity to make a meaningful contribution to the goals of the Paris Agreement presupposes predictability, adequacy and sustainability in the provision of finance as provided for under the Paris Agreement which in practice has been hampered by inadequate provision of finance,” he said.
According to Mr Nzovu, the cost of achieving Sustainable Development Goal by 2030 in Africa was estimated at US$1.3 trillion a year.
He was concerned that domestic financing mechanisms alone were insufficient to meet the scale of interventions required to attain the 1.5/2 degrees Celsius temperature limit including meeting the rising cost of adaptation and losses and damages.
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