Category: News

Stove maker floats Sh1.5bn bond for Kenya, Nigeria upgrade

Cooking stove manufacturer Burn has issued a $10 million (Sh1.5 billion) green bond whose proceeds will support clean energy projects in Kenya and Nigeria.

The company said the proceeds from the bond will allow it to increase its existing manufacturing capacity in Kenya as well as launch a new manufacturing facility in Lagos, Nigeria.

“Production will increase from the current 400,000 units per month to 600,000 units and will produce a range of life-saving biomass, electric, and LPG (liquefied petroleum gas) stoves,” it said in a statement.

The funds from the green bond are poised to extend these benefits to an extra two million households in the year 2024.

“Our decision to issue the first green bond to support clean cooking underscores our strong belief in the power of financial innovation to drive positive environmental and social change. Leveraging benefits such as investment communities’ interest in green financing and potential tax advantages to investors, green bonds have gained considerable traction in recent years. Burn is excited to deploy this innovative instrument to catalyse sustainable development” said Peter Scott, CEO and founder of Burn.

The US firm launched its first full manufacturing facility in Kenya in 2014. A brief on its website said that the solar-powered facility has a capacity of 250,000 stoves per month.

The bond issuance was supported by Dry Associated Limited, acting as the placement agent with FSD Africa, a specialist development agency funded by UK International Development, providing technical input on the bond framework and contributing technical assistance for the second-party opinion which was conducted by Agusto & Co., the leading Pan-African Credit rating agency and green bond verifier.

“We’re proud to have supported this landmark issuance, the first-ever green bond to finance clean cooking activities in sub-Saharan Africa. Biomass fuel is the main source of energy for cooking for the majority of households in Africa and the proceeds from this capital raise will support these households to transition to more sustainable alternatives” Evans Osano, director of Capital Markets, FSD Africa, said.

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World’s Largest Cookstove Manufacturer To Open Nigerian Plant After Record Green Bond

BURN Manufacturing, the world’s leading clean cookstove manufacturer and distributor, plans to open a new plant in Nigeria’s economic capital, Lagos, after issuing Sub-Saharan Africa’s first-ever green bond.

The Kenyan firm said Friday that proceeds of the $10 million bond will also allow it to increase existing manufacturing capacity in its home country.

Production will increase from the current 400,000 units per month to 600,000 units and will produce a range of life-saving biomass, electric and LPG stoves.

“Our decision to issue the first green bond to support clean cooking underscores our strong belief in the power of financial innovation to drive positive environmental and social change,” Peter Scott, CEO and Founder of BURN, said.

“Leveraging benefits such as investment communities’ interest in green financing and potential tax advantages to investors, green bonds have gained considerable traction in recent years. BURN is excited to deploy this innovative instrument to catalyze sustainable development,” Scott said.

The bond issuance was supported by DRY Associated Limited acting as the Placement Agent.

FSD Africa, a specialist development agency funded by UK International Development, played a key role in providing technical input on the bond framework and contributing technical assistance for the second-party opinion which was conducted by Agusto & Co., the leading Pan-African Credit Rating Agency and Green Bond Verifier.

“We are proud to have supported this landmark issuance, the first-ever green bond to finance clean cooking activities in sub-Saharan Africa,” Evans Osano, Director, Capital Markets, FSD Africa, said.

“Biomass fuel is the main source of energy for cooking for the majority of households in Africa and the proceeds from this capital raise will support these households to transition to more sustainable alternatives,” Osano said.

“These are not only better for the environment but also have health benefits from the reduction of particulate and carbon monoxide emissions which particularly impact women given their greater exposure,” Osano added.

Sub-Saharan Africa urgently needs to mobilise $50 billion annually to address climate adaptation in agriculture, power and urban infrastructure, according to the UN Economic Commission for Africa and the International Monetary Fund (IMF).

Rising temperatures, sea levels, and worsening erratic rainfall are increasing the frequency and intensity of natural disasters and disrupting agricultural production, damaging infrastructure and threatening the sustainability of urban areas in the region.

The expected public financing available from national governments and international donors is however unlikely to be able to meet the financing needs of the region, underscoring the need to mobilise private capital.

A 2022 report by the International Energy Agency on the Africa Energy Outlook suggests that achieving universal access to clean cooking fuels and technologies by 2030 requires shifting 130 million people globally away from dirty cooking fuels each year.

The issuance of green bonds provides a crucial avenue for supporting this shift towards the adoption of cleaner cooking solutions for people.

BURN stoves have been independently verified by reputable institutions such as University of Pennsylvania, University of Chicago, as well as through a comprehensive impact assessment survey conducted by Yunus Social Business. The stoves have consistently been proven to provide substantial health, financial, and climate action benefits.

The funds from the Green Bond are poised to extend these benefits to an extra 2 million households in the year 2024.

Ikechukwu Iheagwam, Regional Director (East Africa) Agusto & Co. expressed delight for supporting BURN Manufacturing in providing a Second Party Opinion (SPO) on this landmark issuance of the first-ever green bond to finance clean cooking in Africa.

“BURN displayed transparency in its pursuit to reduce greenhouse gas emissions following the very detailed scientific process backed by international standards and robust laboratory testing to ensure that the cookstoves consume less wood and charcoal fuel at ISO/IWA Tier 4 thermal efficiency ratings levels,” Iheagwam said.

“While this project is expected to have a significant positive environmental impact in terms of tons of firewood saved and tons of carbon dioxide emissions mitigated for each stove manufactured, the catalytic social, financial, economic and health benefits are quite compelling,” Iheagwam added.

According to Reuben Mabishi, head of research at Dry Associates Investment Bank, the company is proud to have been the Transaction Advisor on BURN’s Green Bond programme.

“The Green Bond programme underscores the opportunities available for fixed-income investments in Kenya to catalyze capital formation, employment, and economic growth,” Mabishi said.

“We are attracted to BURN for the leadership team’s focus, green finance acumen and the scale and professionalism of BURN’s manufacturing operation in Kenya. BURN’s export growth story is a stellar example that Kenya can indeed deliver quality to the world,” Mabishi added.

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For insurance industry, poor awareness slows growth

The Nigeria’s insurance industry has recorded moderate growth in business expansion but still has low penetration when compared with other African countries, NIKE POPOOLA reports

As of the end of June 2023, the insurance industry’s total assets rose by 10.7 per cent to N2.7tn from 2.4tn reported in the corresponding period of 2022, according to the National Insurance Commission.

NAICOM’ statistics department revealed in its Bulletin for Q2, 2023, that the insurance industry’s balance sheet showed assets of non-life business was N1.63tn, while assets of life business stood at about N1.07tn.

The industry generate N551.4bn gross premium written in the first six months of 2023; It had generated N726.2bn gross premium written in the whole of 2022 financial period.

However, despite improvement in the industry’s businesses, the penetration was still below one per cent, according to industry figures.

On contribution to the larger economy, figures obtained from the Nigerian Bureau of Statistics reveal that the finance and insurance sector consists of the two subsectors, financial institutions, and insurance; the former accounted for 90.78 per cent and the latter, 9.22 per cent of the sector respectively in real terms in Q2, 2023.

As a whole, the sector grew at 28 per cent in nominal terms (year-on-year), with the growth rate of financial institutions at 30.41 per cent and 8.29 per cent growth rate recorded for insurance.

The sector’s contribution to the nominal GDP was 4.01 per cent in Q2, 2023, higher than the 3.63 per cent it represented a year previous, and lower than the contribution of 4.11 per cent it made in the preceding quarter.

The contribution of finance and insurance to real Gross Domestic Product totalled 5.26 per cent, higher than the contribution of 4.25 per cent recorded in the second quarter of 2022 by 1.01 per cent points, and lower than 5.35 per cent recorded in Q1, 2023 by 0.08 per cent points.

Perception

According to Mrs Augustina Steve of NAICOM, lack of trust and confidence in Nigerian insurance industry resulting from non-settlement of claims, constitute one of the biggest challenges of the industry.

“Non-settlement of claims has negatively impacted confidence in the industry,” she says.

In Nigeria, she notes, the problem of insurance industry is bad image.

This, according to her, for decades, perception stood as bane of the industry’s growth.

Steve says, “The bad image problem of the industry dates back to early 19th century when Nigerians took over insurance business from the early British managers.

“The way the then Nigerian managers carried out insurance business transactions especially in the area of claims payment made the public to see insurance as a scam.”

Ability to pay claims is the real test of a solvent insurance company, she notes.

She says that the quality of claims administration can make or mar an insurance company.

The NAICOM staff says, “Ideally, insurance business is all about claims payment, since claim is the main reason a policyholder takes up an insurance policy.

“Without claims being paid by insurance companies, people are not likely to take up insurance policies, and insurance company will not maximise profits, thus claims payment in insurance contract serves as spice that attracts potential policyholders to insurance patronage.”

She observers that experience has shown that some policyholders are dissatisfied with how they are treated by the insurers when loss occurs.

Some of the complaints by claimants about insurance claims management, she notes, are insurance companies’ request for too much evidence and documentations to prove a loss; some claims are not settled because the insurer refuses to admit liability; when claims are settled, they are not paid in full.

Other complaints, she says include that some claims are rejected on purely technical grounds; claims are generally unduly delayed; the insurer argues that the claims are fraudulent, among others.

Challenges

According to the President/ Chairman Of Council, Lagos Chamber Of Commerce & Industry, Dr. Michael Olawale-Cole, the insurance industry has experienced minimal growth in real terms over the years due to various challenges faced by stakeholders.

“These challenges include limited awareness among the general population regarding the significance of insurance, low purchasing power, disruption from technology, unfavourable economic conditions, apathy toward filing claims for damages, and diverse religious and cultural sentiments, among other factors,” he says.

The Nigerian insurance industry, despite its enormous potential, he observes, is still at the infant stage and far behind its African peers judging by key indicators.

According to the global insurance market report, he says, the insurance penetration rate for Nigeria and South Africa is 0.5 and 12.2, respectively. While other leading emerging economies, kenya (2.9) and ghana (1.2) have low insurance penetration rates, Nigeria has the lowest figure comparatively, despite being the largest economy in Africa, he says.

Undoubtedly, the LCCI boss says, the insurance sector has potential for development due to various alterations in the regulatory framework, necessitating future modifications in the operational practices.

He says, “It has the potential to achieve enhanced success in the aftermath of the pandemic via the adoption of novel strategic approaches by its stakeholders aimed at growing the sector.

“The future of the insurance business hinges on the extent and speed of digital transformation since it has the potential to enable industry participants to secure a significant market share. Digitalisation will provide a streamlined and efficient experience for clients entering the insurance sector.”

Awareness

The President, Chartered Insurance Institute of Nigeria, Mr Edwin Igbiti, says insurance plays a pivotal role in safeguarding the financial well-being of individuals, businesses, and even governments.

It serves as a safety net in times of unexpected circumstances or unforeseen events, he says.

Igbiti says, “Our aim as insurance practitioners is to educate and provide peace of mind to our clients, ensuring that they are adequately covered and prepared for any risk that may arise.

“We face certain challenges that hinder the growth and effectiveness of the insurance industry in our community. Lack of awareness about the benefits of insurance and its role in economic development is prevalent among our people.”

The CIIN boss seeks the support of the government and other organisations in creating awareness campaigns to educate the public and promote a culture of insurance, emphasising its importance in mitigating risk and protecting their assets.

“We request assistance in advocating for policies and regulations that promote transparency, fairness, and sustainability within the insurance sector,” he says

Service delivery

Head SERVICOM, Adeyemi Abubakar, attributes poor insurance penetration in Nigeria to the peculiar market environment, limited public awareness and negative public perception by those who are aware of insurance.

“But in the reality, inadequate service delivery is a major challenge to why insurance acceptance has been very low,” he says.

According to him, building confidence and promoting public understanding on the insurance mechanism, effective consumer protection and education will build consumer trust and confidence, consumer trust builds the insurance market through insurance premium volume.

He says that insurance market growth generates savings, investment and employment.

Insuretech

Mr Ibrahim Ngaski of Information Technology Department, NAICOM, says digital technology has taken the world by storm affecting, changing and improving the way things are done.

The insurance industry, he notes, is currently lagging behind and needs to reassess its business model, re-evaluate its strategy and make the digital agenda a high priority.

It is time for insurers to evolve and respond to these changes in order to meet up with customers’ expectations; and that requires a different set of skills, culture and operating model, he notes.

He explains that, “The term ‘Insurtech’ is coined from the combination of two words ‘Insurance’ and ‘technology’.

“Insurtech is the use of technological innovations designed to make the current insurance model more efficient. People in modern society want to be able to buy travel insurance, life insurance, health insurance, property insurance, and other products with the tap of a finger on their devices, rather than having to sift through stacks of forms.

“Insurtech start-ups are aware of this and have developed a method, for people to obtain easily accessible and ultra-customised insurance policies.”

NAICOM, he says, recently partnered with FSD Africa 2022 to launch the BimaLab Insurtech initiative in Nigeria, which will enable the implementation of ideas for improving insurance in the country.

He says, “BimaLab Nigeria aims to close insurance market gaps by educating, nurturing, and promoting innovations and Insurtech start-ups.

“The innovators were selected to participate in the 10-week programme that provide them with the expertise, resources and support to develop and scale market-ready solutions that bring social and or commercial value to Nigeria’s Insurance sector by bringing creative ideas to the table.”

According to him, insurance companies can maintain a competitive edge by automating, improving and optimising their business processes without compromising efficiency, quality, and response time.

This will enhance employee productivity, speed-up processes, raise customer service levels, improve customer experiences, reduce operational expenses and increase operational efficiency, he says.

He adds that there is an urgent need for the insurance industry to adopt technologies to provide digital solutions.

When this is done, he says, it will improve access to insurance by providing digital channels of distribution, enhancing easier access to insurance products and coverage, speedy issuance of coverage and claims payment and provides Innovative products to their customers.

Growth initiatives

The Commissioner for Insurance, NAICOM, Sunday Thomas, says, the commission has shown a positive attitude to market development by the release of the Soundbox guidelines which is an instrument to test ingenuities in the market.

He says the commission seeks to facilitate and promote innovative insurance solutions that will address the gaps in current insurance offerings.

He adds that, “there is the urge to intensify the ongoing drive to facilitate platforms that address the demand-supply gap; encourage specialised products that addresses the needs of the oil and gas industry; Address all potential regulatory impediments; support the development of human capacity and ensure technical capacities of insurance suppliers; ensure adequate risk pricing and comprehensive coverages and risk management

“As the regulator, we are committed to creating an enabling environment that will consistently enhance increased capacity of the Insurance Institutions both financially and technically.”

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African alliance targets financial instrument for mangroves

Financial instruments supporting mangroves and forestry are under consideration by members of the African Natural Capital Allliance (ANCA), an executive at the organisation has said.

ANCA is in conversation with financial institutions looking to create innovative instruments that support mangroves and forests, according to Dorothy Maseke, head of ANCA’s secretariat.

“ANCA and FSD Africa are looking towards supporting a number of specialised financial instruments in mangroves and forestry,” Maseke told Carbon Pulse.

These could combine elements of bonds, guarantees, and insurance, she said. Established in 2022 by non-profit FSD Africa, ANCA is an African-led initiative whose members – including the likes of Standard Chartered, KCB, and Equity Bank – together manage assets of $390 billion.

Conservation bonds could be a key area of expansion for ANCA members, Maseke said.

“The discussions on opportunities are real. We are doing a lot in terms of connecting our partners, to support them on this journey, because many are interested. They just don’t know where to start,” Maseke said.

Regulation needs to change to support conservation-related bonds as “capital market structures in Africa do not necessarily support them,” she said.

“When the regulator supports capital market structures that will support this kind of investment, then it gives financial institutions, investors, and private equity the confidence to put their money on the table,” she said.

“It also enables fund managers or advisory firms to actually develop these bonds. Those are some of the things that ANCA will be pushing for.”

The only conservation-related bond on the continent to have been issued so far was the World Bank’s ‘rhino bond’, a $150 million issuance in 2022 in support of black rhinos in South Africa.

AFRICAN BIODIVERSITY CREDITS?

Development agencies and small project owners are driving discussion on the topic of biodiversity credits in Africa, another novel way of financing nature, Maseke said.

“Those developers who for years have been working on small projects, now all of a sudden are starting to pay attention,” she said.

“You may find some financial institutions who decide to develop the [biodiversity] credits market. Some may want to put up a biodiversity credits exchange.”

When governments drawing up nature strategies turn to private financing, they will eventually begin to work with these smaller actors on biodiversity credits, she predicted. “At some point, they’re going to converge. In some countries, they’re already converging.”

“Strong discussions” about biodiversity credits from market actors in countries including Rwanda, Ghana, Kenya, and nations around the Congo Basin are underway, she said.

“Kenya wants to go into the green economy and the bioeconomy is a key part of that. There’s a whole discussion of bioeconomies from biodiversity-rich African nations. Building a bioeconomy is the next frontier.”

However, lessons on biodiversity credits have been learned from the carbon credits market, she said. “It’s still a developing concept. It’s also coming on the backdrop of very negative press from the carbon credit side.”

“There’s still a lot of research that needs to be done in terms of, is the African market ready to go fully into it? That needs to be done fast.”

One advantage a voluntary biodiversity credits market would have over its carbon equivalent is that the former already has Indigenous Peoples and local communities at the centre, she said.

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Africa Blue Wave, a $1 million initiative, launched to support African tech startups

BFA Global, FSD Africa, and the International Union for Conservation of Nature (IUCN) have launched the Africa Blue Wave, a $1 million initiative to support tech startups.

The targeted startups will contribute to more sustainable livelihoods and use of ocean and water resources. This initiative, made possible through funding from FSD Africa and the Canadian Government, builds on TECA’s (Triggering Exponential Climate Action) expertise in fostering blue innovation over the last year through a successful pilot wave supported by FSD Africa.

The Africa Blue Wave will support high-potential individuals who demonstrate a passion for addressing climate issues in Africa’s blue economy. It will be implemented by TECA, an initiative of BFA Global, with support from OceanHub Africa.

The wave will recruit 40 innovators from Kenya, Tanzania, Comoros, Madagascar, and Mozambique. Selected participants will receive support in the form of mentorship, guidance from industry experts, networking opportunities, and initial capital investment. This can help them build and bring their climate and ocean solutions to market. At the end of the wave, participants will have the opportunity to showcase their solutions and pitch their businesses to investors, potential partners, and industry leaders to secure additional support and investment.

“As we embark on the Africa Blue Wave, we carry with us the invaluable lessons learned from our inaugural wave. These insights will be the cornerstone of our commitment to making this new wave bigger, better, and more impactful than ever before. We’ve demonstrated that solutions can be homegrown by local talent, and I am excited to work with innovators to create more solutions that contribute meaningfully to local and global climate challenges.” Shirley Mburu, TECA Program Director, BFA Global

“The initiative aims to invest in Africa’s young innovators to catalyse solutions to address ocean challenges and achieve sustained ocean health across five priority seascape areas in Comoros, Kenya, Madagascar, Mozambique and Tanzania. Our long term goal, as envisaged in the Great Blue Wall initiative, is to transform coastal economies into drivers of positive conservation and socioeconomic development. We commend and greatly support Africa’s leadership and efforts in accelerating the development of a regenerative blue economy on the continent,” Thomas Sberna, Regional Head, Coastal and Ocean Resilience, IUCN Eastern and Southern Africa.

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Project accelerator launches to drive investments in African biodiversity

A group of five companies and organisations has launched an accelerator to attract investment in high-quality biodiversity projects across Africa, with a first call for proposals open until late next month.

Biodiversity Investments – Researcher & Accelerator (BIRA) will be hosted by the African Leadership University School of Wildlife Conservation and co-funded by global entrepreneur firm Dalberg and FSD Africa Investments, with contributions from biodiversity specialist firms CreditNature and Xilva.

The initiative will work to develop ecosystem measurement frameworks suited to the African reality, including user-friendly investor metrics, as well as offer grants to organisations that provide comprehensive assessments and monitoring systems to understand the environmental impact of pipeline companies, according to Dalberg’s website.

“Further, BIRA will engage investors through the grant which will be used to co-develop financing propositions and facilitate investment memoranda and marketing to promote credits,” it said.

“Through such a structured approach, the funding can prepare project developers to be investor ready whilst developing a pipeline of biodiversity deals in Africa and attract investors to the sector.”

In a comment on LinkedIn, CreditNature CEO and founder Cain Blythe said BIRA has been designed to “develop a credible approach to accelerating biodiversity and ecosystem measurements as a core offering for investable nature-based solution projects in Africa”.

One of CreditNature’s contributions to BIRA will be to apply its Natural Asset Recovery Investment Analytics (NARIA) framework.

“We’re offering African projects a high integrity, science-based, and scalable approach to measuring ecosystem integrity,” said Blythe.

“For projects in Africa, this means setting robust ecosystem baselines and forecasting unique recovery and rewilding strategies, all while preparing for potential investors.”

BIRA will be accepting applications for its first round of grants until Oct. 20, without specifying the amount available.

“Applicants must have biodiversity projects in Africa, have completed a business plan or feasibility study, and look to attract investors/buyers,” Dalberg said.

“BIRA will support select projects in conducting assessments of their biodiversity impact and investor readiness, and it will help showcase investor-ready projects to potential funders.”

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The African Leaders Nairobi Declaration on Climate Change and Call to Action

PREAMBLE

We, the African Heads of State and Government, gathered for the inaugural Africa Climate Summit (ACS) in Nairobi, Kenya, from 4th to 6th September 2023; in the presence of other Global Leaders, Intergovernmental Organizations, Regional Economic Communities, United Nations Agencies, Private Sector, Civil Society Organizations, Indigenous Peoples, Local Communities, Farmer Organizations, Children, Youth, Women and Academia:and Government in the presence of global leaders and high-level representatives on 6 September 2023 in Nairobi Kenya

  1. Recall the Assembly Decisions (AU/Dec.723(XXXII), AU/Dec.764 (XXXIII) and AU/Dec.855(XXXVI)) requesting the African Union Commission to organize an African Climate Summit and endorsing the offer by the Republic of Kenya to host the Summit;
  2. Commend E Dr. William Samoei Ruto, President of the Republic of Kenya, and Chair of the Committee of African Heads of State and Government on Climate Change (CAHOSCC) for providing the political leadership of an African vision that simultaneously pursues climate change and development agenda;
  3. Commend also E Moussa Faki Mahamat, the Chairperson of the African Union Commission (AUC), for his dedication and commitment towards the convening of the Summit;
  4. Further Commend the Arab Republic of Egypt for the successful COP27 and its historic outcomes, particularly regarding loss and damage, just transition and energy, and call for the full implementation of all COP27 decisions;
  5. Acknowledge that climate change is the single greatest challenge facing humanity and the single biggest threat to all life on Earth, demanding urgent and concerted action from all nations to lower emissions and reduce the concentration of greenhouse gases in the atmosphere;
  6. Take Note of the 6th Assessment Report (AR6) of the Intergovernmental Panel on Climate Change (IPCC), stating that the world is not on track to keeping within reach the 1.5°C limit agreed in Paris and that global emissions must be cut by 43% in this decade;
  7. Underscore the IPCC confirmation that Africa is warming faster than the rest of the world and if unabated, climate change will continue to have adverse impacts on African economies and societies, and hamper economic growth and wellbeing;
  8. Recognise that Africa is not historically responsible for global warming, but bears the brunt of its effects, impacting lives, livelihoods, and economies;
  9. Reaffirm the principles set out in the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement, namely equity, common but differentiated responsibilities and respective capabilities;
  10. Express concern that many African countries face disproportionate burdens and risks arising from climate change-related unpredictable weather events and patterns, including prolonged droughts, devastating floods, out-of-season storms, and wildfires, which cause massive humanitarian crisis with detrimental impacts on economies, health, education, peace and security, among other risks;
  11. Recall that only seven years remain to achieve the Sustainable Development Goals of the 2030 Agenda, and note with concern that 600 million people in Africa still lack access to electricity while about 970 million lack access to clean cooking;
  12. Further note that extreme weather events and changes in water cycle patterns are making it more difficult to access safe drinking water, resulting in about 400 million people in Africa having no access to clean drinking water and 700 million without good sanitation;
  1. Further recognise that African cities and urban centres are growing rapidly, and by 2050 would be home to over 1.0 billion people. Cognisant of the fact that rapid urbanization, poverty, and inequality limit planning capacities and other urban dynamics which increase people’s exposure and vulnerability to hazards and have thus turned cities into disaster hotspots across the continent;
  2. Concerned that despite Africa having an estimated 40 percent of the world’s renewable energy resources, only $60 billion or two percent of US$3 trillion renewable energy investments in the last decade have come to Africa;
  3. Reiterate Africa’s readiness to create an enabling environment, enact policies and facilitate investments necessary to unlock resources to meet our own climate commitments, and contribute meaningfully to decarbonisation of the global economy;
  4. Recognise that Africa’s vast forests, especially the Congo Basin rainforest are the largest carbon sinks globally, and the important ecosystem services provided by Africa’s vast savannahs, Miombo woodlands, peatlands, mangroves, and coral reefs, it is time that Africa’s natural capital wealth is properly measured by recognizing its contribution to reducing global carbon emissions;
  5. Further recognise the critical importance of the oceans in climate action and commitments made on ocean sustainability in multiple fora such as the Second UN Oceans Conference in 2022, and the Moroni Declaration for Ocean and Climate Action in Africa in 2023;
  6. Emphasise that Africa possesses both the potential and the ambition to be a vital component of the global solution to climate As home to the world’s youngest and fastest-growing workforce, coupled with massive untapped renewable energy potential, abundant natural assets and an entrepreneurial spirit, our continent has the fundamentals to spearhead a climate compatible pathway as a thriving, cost-competitive industrial hub with the capacity to support other regions in achieving their net zero ambitions;

Now hereby identify the following to be critical agendas for urgent collective action at the continental and global level:

  1. We call upon the global community to act with urgency in reducing emissions, fulfilling its obligations, honouring past promises, and supporting the continent in addressing climate change, specifically to:
      • Accelerate all efforts to reduce emissions to align with goals of the Paris Agreement
      • Honour the commitment to provide $100 billion in annual climate finance, as promised in 2009 at the UNFCCC COP15 in Copenhagen, Denmark
      • Uphold commitments to a fair and accelerated process of phasing down unabated coal power and phase out of inefficient fossil fuel subsidies while providing targeted support to the poorest and most vulnerable in line with national circumstances and recognizing the need for support towards a just transition.
  2. We call for climate-positive investments that catalyse a growth trajectory anchored in the industries poised to transform our planet and enable African countries to achieve stable middle-income status by
  3. We urge global leaders to join us in seizing this unprecedented opportunity to accelerate global decarbonization, while pursuing equality and shared prosperity.
  4. We call for the operationalization of the Loss & Damage fund as agreed at COP27 and resolve for a measurable Global Goal on Adaptation (GGA) with indicators and targets to enable assessment of progress against negative impacts of climate change.

In recognition of the scale, urgency and importance of these collective actions, we commit to:

  1. Develop and implement policies, regulations and incentives aimed at attracting local, regional and global investment in green growth, inclusive of green and circular economies;
  2. Propel Africa’s economic growth and job creation in a manner that reflects our commitments to the Paris Agreement and also aids global decarbonization efforts, by leapfrogging the traditional progression of industrial development and fostering green production and supply chains on a global scale;
  3. Focus our economic development plans on climate-positive growth, including expansion of just energy transitions and renewable energy generation for industrial activity, climate smart and restorative agricultural practices, and essential protection and enhancement of nature and biodiversity;
  4. Promote clean cooking technologies and initiatives as a just energy transition and gender equality for African rural women, youth, and children;
  5. Strengthen actions to halt and reverse biodiversity loss, deforestation, and desertification, as well as restore degraded lands to achieve land degradation neutrality; and implement the Abidjan declaration on achieving gender equality for successful land restoration;
  6. Strengthen continental collaboration, which is essential to enabling and advancing green growth, including but not limited to regional and continental grid interconnectivity, and further accelerating the operationalization of the Africa Continental Free Trade Area (AfCFTA) Agreement;
  7. Advance green industrialization across the continent by prioritizing energy-intense industries to trigger a virtuous cycle of renewable energy deployment and economic activity, with a special emphasis on adding value to Africa’s natural endowments;
  8. Promote investments in reskilling to unlock the human capital that will power for Africa’s inclusive green transition;
  9. Redouble our efforts to boost agricultural yields through sustainable agricultural practices, to enhance food security while minimizing negative environmental impacts;
  10. Contribute to the development of global standards, metrics, and market mechanisms to accurately value and compensate for the protection of nature, biodiversity, socio-economic co-benefits, and the provision of climate services;
  11. Finalise and implement the African Union Biodiversity Strategy and Action Plan, with the view to realizing the 2050 vision of living in harmony with nature;
  12. Provide all the necessary reforms and support required to raise the share of renewable energy financing to at least 20 percent by 2030;
  13. Promote the production of green hydrogen and hydrogen derivatives such as green fertilizer and synthetic fuels;
  14. Integrate climate, biodiversity and ocean agendas into national development plans and processes to increase resilience of local communities and national economies;
  15. Promote regenerative blue economy and support implementation of the Moroni Declaration for Ocean and Climate Action in Africa, and the Great Blue Wall Initiative, whilst recognising the circumstances of Africa’s Island States;
  16. Support smallholder farmers, indigenous peoples, and local communities in the green economic transition, given their key role in ecosystems stewardship;
  17. Identify, prioritize,  and  mainstream  adaptation  into development policy-making and planning, including in the context of Nationally Determined Contributions (NDCs);
  18. Build effective partnerships between Africa and other regions, to meet the needs for financial, technical and technological support, and knowledge sharing for climate change adaptation;
  19. Promote investments in urban infrastructure including through upgrading informal settlements and slum areas to build climate resilient cities and urban centres;
  20. Strengthen early warning systems and climate information services, as well as taking early action to protect lives, livelihoods and assets and inform long-term decision-making related to climate change risks. We emphasise the importance of embracing indigenous knowledge and citizen science in both adaptation strategies and early warning systems;
  21. Support implementation of the Africa Water Investment Programme (AIP), which aims to close the Africa water investment gap by mobilising US$30 billion by 2030;
  22. Enhance drought resilience systems to shift from crisis management to proactive drought preparedness and adaptation, to significantly reduce drought vulnerability of people, economic activities, and ecosystems;
  23. Further enhance our inclusive approach including through engagement and coordination with the children, youth, women, persons living with disabilities, indigenous people, and communities in climate vulnerable situations;
  24. Accelerate implementation of the African Union Climate Change and Resilient Development Strategy and Action Plan (2022-2032)

CALL TO ACTION:

  1. We call upon world leaders to recognise that decarbonizing the global economy is an opportunity to contribute to equality and shared
  2. We invite Development Partners from the global north and south to align technical and financial support to Africa for sustainable utilization of Africa’s natural assets for low carbon development that contributes to global decarbonization.
  3. To accomplish this vision of economic transformation in harmony with our climate needs, we further call upon the international community to contribute to the following:
    • Increase Africa’s renewable generation capacity from 56 Giga Watts (GW) in 2022 to at least 300 GW by 2030, both to address energy poverty and to bolster the global supply of cost-effective clean energy for industry.
    • Shift exports of energy intensive primary processing of Africa’s raw material back to the continent, to serve as an anchor demand for our renewable energy and a means of rapidly reducing global
    • Access to, and transfer of environmentally sound technologies, including technologies to support Africa’s green industrialisation and transition.
    • Design global and regional trade mechanisms in a manner that enables products from Africa to compete on fair and equitable
    • Request that trade-related environmental tariffs and non-tariff barriers must be subject to multilateral discussions and agreements and not be unilateral, arbitrary or discriminatory measures.
    • Accelerate efforts to decarbonize the transport, industrial and electricity sectors through the use of smart, digital and highly efficient technologies such as green hydrogen, synthetic fuels and battery storage.
    • Design industry policies that incentivize global investment to locations that offer the most and substantial climate benefits, while ensuring benefits for local communities.
    • Implement a mix of measures that elevate Africa’s share of carbon markets.
  4. Reiterate the decision 1/COP27 that states that global transformation to a low-carbon economy is expected to require investment of at least USD 4 – 6 trillion per year and delivering such funding in turn requires a transformation of the financial system and its structures and processes, engaging governments, central banks, commercial banks, institutional investors and other financial actors.
  5. We call for collective global action to mobilise the necessary capital for both development and climate action, echoing the statement of the Paris Pact for People and the Planet, that no country should ever have to choose between development aspirations and climate action.
  6. Call for concrete, time-bound action on the proposals to reform the multilateral financial system currently under discussion specifically to:
    • Build resilience to climate shocks, including better deployment of the Special Drawing Rights (SDRs) liquidity mechanism and disaster suspension clauses.
    • Re-channeling of   at   least   $100billion   of SDRs to Africa, including through institutions such as the African Development Bank which will be able to leverage the SDRs by three to four times. We also call for the formation of a group of SDR donors to expedite this re- channeling ahead of COP28.
    • Propose for consideration a new SDR issue for climate crisis response of at least the same magnitude as the Covid19 issue (US$650 billion).
    • Better leverage of the balance sheets of MDBs to scale up concessional finance to at least $500b per year.
    • Improve debt management, including:
      • the inclusion of ‘debt pause clauses’, and
      • the proposed expert review of the Common Framework and the Debt Sustainability Analysis.
    • Provide interventions and instruments for new debt relief to pre-empt debt default to:
      • extend sovereign debt tenor, and
      • include a 10-year grace
    • Decisively act on the promotion of inclusive and effective international tax cooperation at the United Nations with the aim to reduce Africa’s loss of US$ 27 billion annual corporate tax revenue through profit shifting, by at least 50% by 2030 and 75% by 2050.
      1. Put additional measures to crowd in and de-risk private capital, such as blended finance instruments, purchase commitments, partial foreign exchange (FX) guarantee and industrial policy collaboration, which should be informed by the risks that drive lack of private capital deployment at
      2. Redesign MDB governance, to ensure a “fit for purpose” system with appropriate representation, voice, and agency of all countries.
  1. Note that multilateral finance reform is necessary but not sufficient to provide the scale of climate financing the world needs to achieve 43 percent emission reduction by 2030 required to meet the Paris Agreement goals, without which keeping global warming to 1.5 degrees celsius will be in serious jeopardy.
  2. Further note that the scale of financing required to unlock Africa’s climate-positive growth is beyond the borrowing capacity of national balance sheets, or at the risk premium that Africa is currently paying for private capital.
  3. Draw attention to the finding that inordinate borrowing costs, typically 5 to 8 times what wealthy countries pay (the “great financial divide”), are a root cause of recurring debt crises in developing countries and an impediment to investment in development and climate action.
  4. We call for adoption of principles of responsible sovereign lending and accountability encompassing credit rating, risk analysis and debt sustainability assessment frameworks and urge the financial markets to commit to eliminate this disparity by 2025.
  5. Urge world leaders to consider the proposal for a global carbon taxation regime including a carbon tax on fossil fuel trade, maritime transport and aviation, that may also be augmented by a global financial transaction tax (FTT) to provide dedicated, affordable, and accessible finance for climate-positive investments at scale, and establish a balanced, fair and representative global governance structure for its management, with an assessment of the financial implications on socio- economic impacts on Africa.
  6. Propose to establish a new financing architecture that is responsive to Africa’s needs including debt restructuring and relief, and the development of a new Global Climate Finance Charter through UNGA and COP processes by 2025.
  7. We call for revaluation of the Gross Domestic Product of Africa through the proper valuation of its abundant natural capital and ecosystem services including but not limited to its vast forests that sequester carbon to unlock new sources of wealth for Africa. This will entail the use of natural resource accounting and development of national accounting standards.
  8. Note that the first Global Stocktake which will conclude at COP28 offers a pivotal opportunity to correct course by including a comprehensive outcome, both backward and forward looking.
  9. Resolve to establish the Africa Climate Summit as a biennial event convened by African Union and hosted by AU Member States, to set the continent’s new vision, taking into consideration emerging global climate and development issues.
  10. Resolve also that this Declaration will serve as a strong contribution from the African continent to the global climate change process including COP 28 and beyond.
  11. Welcome the pledges and commitments made at the Summit to a tune of USD 26 billion from Development Partners including the European Union, the United Arab Emirates (UAE) as COP28 President- Designate, the Government of the United States, MDBs, Philanthropic Foundations, and Private Sector, to support Africa especially in the areas of renewable energy and adaptation.
  12. Appreciate the efforts of the United Arab Emirates as the COP28 President-Designate in the preparation of COP28 and affirm Africa’s full support for a successful and ambitious outcome of COP28.
  13. Request African Union Commission to develop an implementation framework for this Declaration and to make Climate Change an AU theme for the Year 2025 or 2026.
  14. Thank the Government and People of the Kenya for successfully hosting the inaugural Africa Climate Summit, and the warm hospitality accorded to all delegations to the Summit.

In witness of which we the African Heads of State and Government assembled in the (venue) of the Kenyatta International Convention Centre in Nairobi now make this declaration in the presence of global leaders and high-level representatives on this 6th day September 2023, in Nairobi, Kenya

Kenya should stay the low carbon course for green economy growth

As delegates gather in Nairobi for the Africa Climate Summit, it is a good time to reflect on the implications of a changing climate and ecology for Kenya’s economy.

Climate change poses an existential threat to all of us, and if neglected, its destruction will not exempt economic indices and value chains, particularly in Kenya.

But there’s another Kenyan story to tell – one of great opportunity – if we intervene to defend ourselves against the ravages.

Innovative climate finance strategies that deliver locally-led and domestically financed climate and economic resilience, as well as the mobilisation of green investment, can drive the country’s green transformation agenda and position Kenya to benefit from sustainable economic growth.

It is an unjust but nonetheless indisputable fact that, though Kenya contributes less than one percent of global greenhouse gas (GHG) emissions, she remains highly exposed to the impacts of climate change.

However, global efforts to reduce GHG emissions present accelerated productivity and inclusion opportunities if Kenya maintains a low-carbon development pathway.

Indeed, the country’s progress in meeting the Nationally Determined Contributions (NDC) commitments has the potential to accelerate sustainable economic growth.

The ongoing reconfiguration of global supply chains as well as the continued expansion of green opportunities like carbon markets, have the potential to deliver unparalleled development impact.

Climate-positive investments and policies will contribute to growth and catalyse green sectors – which in turn can reduce operating costs, increase private sector revenues, create green jobs, and generate social benefits.

It’s worth remembering that policy and legislative frameworks that enable access to these pool finances to support implementation already exist.

Crucial to consider also is the fact that, over the medium term, a low carbon economy would improve Kenya’s trade balance and support foreign exchange stability measures, as well as lessen the country’s destabilising exposure to fuel price shocks and supply chain disruptions.

Additionally, the operationalisation of policies and regulations that support positive and urgent climate action will help deliver the government’s commitment to prioritise the lives and livelihoods of Kenyans.

Through the National Treasury, and supported by development partners, a raft of measures including the Green Fiscal Incentives Policy Framework, which seeks to steer Kenya towards a low-carbon climate-resilient green economic development pathway through fiscal and economic mechanisms (incentives and disincentives), will enhance mobilisation of climate finance from various sources to finance the NDC and NCCAPs.

These measures will support the country’s environmental exposure, support national climate change goals, and promote clean energy investments, as well as catalyse development.

The Climate Policy Initiative estimates that it will cost Kenya Sh6.7 trillion (U$ 65 billion) between 2020-2030 to implement mitigation and adaptation actions and strategies.

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