Reuters Report FT Moral Money Report on Africa Climate Summit 2023 September 2023

1. Reuters Report- on Africa Climate Summit
Africa Climate week kicked off with a $450 million carbon credit pledge
from the United Arab Emirates on Monday as Kenyan President William
Ruto urged African leaders to seize the opportunity presented by climate
finance. However, several speakers see little progress being made towards
filing the climate financing hole.
An initiative to boost Africa's carbon credit production 19-fold by 2030
drew hundreds of millions of dollars of pledges on Monday as Kenyan
President William Ruto opened the continent's first climate summit.
In one of the most anticipated deals, the UAE committed to buying $450
million of carbon credits from the Africa Carbon Markets Initiative
(ACMI).
The ACMI was launched at Egypt's COP27 summit last year. African
leaders are pushing market-based financing instruments such as carbon
credits, which allow polluters to offset emissions through activities like
planting trees or investing in renewable energy projects.

2. Kenya's President William Ruto during the opening ceremony of the Africa
Climate Summit (ACS) 2023 at KICC in Nairobi, Kenya, Sept. 4, 2023.
REUTERS/Monicah Mwangi

3. Slow progress
"For a very long time we have looked at this as a problem. It is time
we flipped and looked at it from the other side," Ruto told delegates.
"We must see in green growth not just a climate imperative but also
a fountain of multi-billion-dollar economic opportunities that Africa
and the world is primed to capitalize," he said.
Several speakers at the summit, however, said they had seen little
progress toward accelerating climate financing. "There hasn't been
any success for an African country in attracting climate finance," said
Bogolo Kenewendo, a United Nations climate adviser and former
trade minister in Botswana.
Many investors still saw the continent as too risky, Bogolo said.
Kevin Kariuki, a vice president at the African Development Bank, told
Reuters the deals announced on Monday were "very welcome" but
did not come close to filling the climate financing hole.
He said African states would push at the COP28 later this year for
the expansion of special drawing rights at the International Monetary
Fund that could unlock $500 billion worth of climate finance, which
could be leveraged up to five times.
Patricia Scotland, secretary-general of the Commonwealth of 56
countries, said the pledged funding was more than symbolic, as it

4. showed people understood the emergency, but that current climate
finance flows to Africa were still "shockingly low".

5. Other investments
Climate Asset Management - a joint venture of HSBC Asset
Management and Pollination, a specialist climate change investment
and advisory firm - also announced a $200 million investment in
projects that will produce ACMI credits.
Britain said UK-backed projects worth 49 million pounds ($62
million) would be announced over the course of the summit, and
Germany announced a 60-million euro ($65 million) debt swap with
Kenya to free up money for green projects.

6. What’s required?
The Climate Policy Initiative estimates that the continent
needs $277 billion annually to implement 'nationally
determined contributions' to meet 2030 climate goals.
Annual climate finance flows in Africa stand at only $30
billion for now.
Another recent report co-authored by executive secretary
at the UN Economic Commission for Africa, Vera Songwe,
concluded that multilateral development banks (MDBs)
yearly climate finance must triple within five years, from
$60 billion to $180 billion, to help developing economies
globally cope with global warming.
The African Development Bank (AfDB) estimates that loss
and damage costs due to climate change in its region are
between $289.2 billion to $440.5 billion and that a 1°C
increase in temperature is also associated with a greater
probability of conflict in the region of approximately 11%.
The International Monetary fund also estimates that 34 of
59 developing economies most vulnerable to climate
change, many of which are in Africa, are also at a high
risk of fiscal crises.

7. FT Moral Money: Africa Climate Summit pulls in $26bn
in deals
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The first Africa Climate Summit in Nairobi this week was not just about
forging a new “narrative” to bring the continent — which has the world’s
lowest per capita carbon emissions but suffers most from the effects of climate
change — to the front of the global conversation.
The three-day gathering of heads of state also catalysed dozens of deals and
pledges worth $26bn, that, if realised, could prove meaningful for some of the
continent’s most fragile nations. It could also open a raft of new investment
and financing opportunities for clean energy enthusiasts who have, until now,
been wary of investing on the African continent.
One of the deals highlighted by the summit’s host, Kenya’s president William
Ruto, was in Burundi, the world’s poorest country, according to World Bank
data — and one that was off limits to foreign investors for a long time, mainly
due to heightened political risks.
The Burundi project is being developed by Virunga Power, a developer,
investor and operator of renewable power generation and distribution
networks in parts of eastern and southern Africa. It is controlled by electricity
network infrastructure developer Gridworks, owned by British International
Investment, the UK government’s development finance wing.

8. Burundi president Evariste Ndayishimiye waves during a gathering of the ruling party’s youth wing ©
AFP via Getty Images
The $60mn deal created Weza Power, the first new private-sector electricity
distribution company operating nationally in sub-Saharan Africa for a decade.
In its first phase, it will result in some 300,000 Burundians gaining access to
grid electricity. Most inhabitants currently burn kerosene and charcoal for
energy, while businesses have to rely on highly polluting diesel generators.
Over a seven-year period, the new privately owned and operated electricity
distribution company aims to bring grid power to almost 70 per cent of the
population of Burundi, mainly through hydroelectric generation. Currently,
only 12 per cent of the 12mn population have access to electricity.
“This project should reach more than 9mn people throughout the country,”
Martin Ndayizeye, general director at Burundi’s energy ministry, told the
Financial Times. He explained that President Évariste Ndayishimiye’s
government recently updated the central African country’s regulations by
opening up economic sectors “to attract foreign investors”.
This project aims to raise around $1.4bn — or almost 50 per cent of Burundi’s
gross domestic product — over seven years to build a network of distribution
infrastructure that connects two-thirds of the petit pays (“small country”), as
some call it. “Investment in electricity networks is vital to underpin economic
development, as well as to support a transition to renewable energy,” said
Simon Hodson, chief executive of Gridworks.
There’s still much to do. According to the African Development Bank, more
than 640mn Africans have no access to power. One of the targets stated in
Wednesday’s “Nairobi Declaration” by heads of state was to boost Africa’s
renewable generation capacity from 56GW in 2022 to at least 300GW by

9. 2030, “both to address energy poverty and to bolster the global supply of
cost-effective clean energy for industry”.
For Mo Ibrahim, a Sudanese-British billionaire businessman who was a
speaker at the summit, the Nairobi gathering has been “a unique opportunity
to showcase that it is not only possible but essential to reconcile climate and
development — highlighting Africa’s indispensable potential for a global green
transition in order to unlock the financial resources still missing.” (Andres
Schipani)
Central banker Ravi Menon’s parting words for global
leaders
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After 12 years at the helm of the Monetary Authority of Singapore — and a
total of 36 years at the central bank — Ravi Menon grabbed headlines on
Monday with the news that he will depart at the end of this year.
Among leading central bankers, Menon has been one of the most heavily
engaged in responding to climate change — a subject that was the focus of our
conversation on Wednesday, to open the Moral Money Summit Asia in
Singapore.
Since January last year, Menon has served as chair of the Network for
Greening the Financial System — a climate-focused grouping of central banks
and supervisors. That’s put him at the centre of the debate over how central

10. bankers ought to approach this area. As we’ve highlighted, luminaries
including former US Treasury secretary Larry Summers have raised concern
that central banks risk getting distracted from their core mandate.
Ravi Menon: ‘Time is running out. We need to get this done.’ © FT Live
Menon argued that dodging this topic is simply not an option for him and his
peers. “I would say it’s everyone’s mandate, and everyone’s business,” he said.
“We got into this mess because we all thought it was somebody else’s business.
And actually, nobody else was taking responsibility. So everyone needs to lean
in.”
A key priority for NGFS members, Menon said, is pushing financial
institutions to develop “credible transition plans” — a concept that I asked him
to define. To be credible, Menon said, a transition plan needed to be built
around a “science-based pathway” that would show, for each sector, how an
institution’s investment or lending decisions aligned with the global push for
net zero carbon emissions.
But he warned against overestimating the clout of regulators and supervisors
in this space, without more ambitious action by policymakers. In particular, he
added his voice to the chorus calling for governments to reshape the economic
incentives for business by putting a meaningful price on carbon emissions.
“The single most important thing is carbon pricing,” Menon said. “I think
collectively, we should all be pressing governments to put in place realistic
carbon prices. Central banks can’t do that.”
One of Menon’s final tasks as MAS head will be to attend December’s COP28
in Dubai (where Moral Money will, as usual, be reporting daily from the
ground). Last year’s COP27, Menon said, brought a welcome recognition of

11. the need for public capital to play a bigger role in driving investment in clean
energy.
“But how exactly are you going to do that?” he asked. The key priority, Menon
argued, must be a change in approach by multilateral development banks and
other publicly funded institutions. With their current limited risk appetite, he
said, they are “competing with the private sector”. Only with a far greater
emphasis on blended finance — taking riskier bets on “marginally bankable”
projects, to catalyse private sector investment in them too — can these entities
achieve their potential impact, he argued.
“This is one of the major breakthroughs I’m looking forward to in the next
one, two, three years,” Menon said. “Because time is running out. We need to
get this done.” (Simon Mundy)
Smart read
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This week’s Africa Climate Summit featured lots of upbeat talk about the
continent’s potential to profit from the carbon credit market. This new report

12. from Nairobi-based think-tank Power Shift Africa offers a searing
counterargument, calling carbon offsets “a dangerous distraction for Africa”.