Resources
FINANCING AND RESOURCE MOBILISATION FOR THE AFRICAN GREEN STIMULUS PROGRAMME
Public Sector and Development Finance Institutions
Public sources of finance play a catalytic role in leveraging private finance to support the scaling up of AGSP programmes. This could be done by supporting institution-building for economic growth; leveraging domestic and private funds; promoting environmental and social sustainability; improving trade and investment environments; and in the long term, building resilience to future shocks and crises.
Furthermore, the international community, through the convening power of relevant established international agencies, financial arrangements, trade agreements etc., can provide important flows of resources to support the key programmes within the African Green Stimulus Programme.
Potential public financing mechanisms and sources to support the programmes under the AGSP include:
- Domestic financing including Member States budgetary allocations and private sector-based financing. Developing regulatory standards that create a conducive environment for green economy within countries could support this. The use of taxes and market-based tools to stimulate green innovations and investments could also be considered.
- Direct Bilateral funding and Development Partners based mechanisms between Member States and specific Development Partner countries and or organisations.
Financing from Multilateral Development Banks, other development finance institutions and development agencies can be mobilised by:
- Multi-lateral funding mechanisms especially the Green Climate Fund (GCF), Global Environment Facility (GEF), World Bank Climate Investment Funds, Adaptation Fund (ADF), African Development Bank and other sources of international finance and resources, which offer African countries support for green recovery programmes.
- International market-based instruments including Green Bonds and SDG Bonds, Debt-for-Nature or Climate Swaps.
- Aligning AGSP funding priorities with Africa’s programmes on the SDGs, implementation of the Paris Agreement and the post-2020 Global Biodiversity Framework as well as key Agenda 2063 programmes.
- Ensuring public finance is used efficiently and effectively, to support countries to recover from COVID-19 in a clean, safe, inclusive and resilient way.
- Encouraging use of resources, knowledge and international networks to direct more investment in AGSP Programmes within countries more in need.
Mobilising resources from the Private Sector
Private sector investment is envisaged to play a significant role in providing resources at scale for the programmes within the AGSP. Thus, long-term support for the programmes within the key priority areas of the AGSP will require the mobilizing of significant private finance and investment. In addition to leveraging their Environment, Social and Governance (ESG) programmes, private companies could adopt climate-related financial risk disclosures when providing information to investors, lenders, insurers and other stakeholders to support their investment proposals in AGSP projects and programmes.
The private sector could contribute to the AGSP through:
- Investment in newer clean energy technologies; low carbon transport sector; productive, inclusive sustainable agriculture and forestry; ecosystem protection and restoration.
- Through market transformation policies, creation of innovative climate-action asset classes and quantifying cost savings and revenue flows from improved water use and energy efficiency, for example.
- Increased investment in Public-Private Partnerships, and through other innovative financing instruments.
- Greater investment in research and development to support the programmes within the key priority areas of the AGSP.
- Enhanced investment in capacity building and development to support the programmes within the key priority areas of the AGSP.
- Support development, deepening and equitable outreach of digital technology, including to address environmental, health and inequality challenges as well as the interlinkages.
Mobilising resources from donors and philanthropic organisations
Private Foundations have been long-term supporters of funding to charitable organisations and programmes around the world. These Foundations are simultaneously growing in ambition and confidence and are providing significant resources to the developing world, creating new opportunities for small, grassroots NGOs in low-income countries. Therefore, engaging with donors and philanthropic organisations is another potential source of upscaling financing for the programmes under the AGSP.