Climate Finance in East Africa: Stories and Lessons
This post originally appeared on the Climate Development and Knowledge Network's (CDKN) website.
Having recently left the bustling streets and warm hospitality of Addis Ababa, Ethiopia, I’m taking a moment to reflect on all that I have learned at CDKN’s workshop on “Climate Finance in East Africa.” Representatives of government departments and research institutes from Ethiopia, Kenya, Rwanda, Tanzania, and Uganda--as well as members of the donor community and international think-tanks--reflected on their experiences and the challenges faced in mobilizing and effectively deploying climate change finance.
I was inspired by the sense of optimism and confidence among participants as they discussed the ways in which their countries are tackling the climate change challenge. And I was struck by the effort and considerable progress that these East African countries have already made, despite limited resources and numerous obstacles.
Climate Action in East Africa
For example, last month Kenya launched a holistic national climate change action plan, following a comprehensive planning process that brought together all key government ministries, subnational governments, civil society, the private sector, and development partners. Rwanda recently established a National Climate and Environment Fund, which is expected to evolve into an important vehicle for mobilizing private sector investment in climate-friendly technologies and initiatives, such as renewable energy and energy efficiency.
And Ethiopia has established a facility to fund its climate-resilient, green economy (CRGE) strategy. This facility includes two options for development partners to channel their climate finance contributions: directly into a national account, which promotes national ownership by relying entirely on the country’s financial management systems; or through an international intermediary, the United Nations Development Programme.
Emerging Lessons in Mobilizing Climate Finance
As all of us discussed the question of climate change finance from our various perspectives, it became clear that there were a number of emerging messages about what it takes to mobilize and deploy climate finance to achieve low-carbon, climate-resilient development outcomes. A few of these lessons include:
Leadership: Key institutions or senior figures in government must take the lead in driving the transition to low-carbon, climate-resilient development planning and implementation. In Ethiopia for example, the Ministry of Finance and Economic Development plays the key role of chairing the management committee of its CRGE Facility, while the technical expertise is provided by the Environmental Protection Authority.
Accountability: By governments to their citizens, by recipients of climate finance to the providers, and by international climate funds and institutions to the developing countries they fund. Accountability leads to trust, and trust keeps the climate finance flowing.
Policies and Plans: Articulating the country’s vision for a low-carbon, climate-resilient future, and the steps it intends to take to reach it, is a starting point for a comprehensive strategy. Identifying clear priorities for funding is key to staying on track to achieve that vision.
Coordination: Bringing all the relevant stakeholders within and outside of government into the planning process, with appropriate roles and responsibilities assigned, can help ensure broad support for the resulting policies. Kenya has actively engaged a broad range of stakeholders in developing its national climate change action plan.
Capacity: Appropriate technical skills, expertise, and resourcing at all levels of government and in civil society are needed to effectively execute plans and policies. Tanzania’s University of Dar es Salaam has recently established a Climate Change Centre to strengthen Tanzanian expertise in climate change issues.
Business case: Making the case for low-carbon investment can convince private-sector investors that they will have much to gain by putting their money into climate-friendly technologies. In Kenya, for example, the government has started funding exploration at potential geothermal energy sites, which has led to keen interest by the private sector to invest in geothermal power development.
What these East African countries have in common is their recognition that climate change is not just an environmental issue, but one that lies at the heart of sustainable economic and social development. Furthermore, they are not letting domestic progress hinge on securing climate finance from developed countries, or on making progress in the UNFCCC international climate negotiations. Despite the need for additional climate finance, these East African nations are taking bold steps to mainstream climate change into development planning and financing, as well as allocating their own funds towards implementation. In doing so, they are proactively charting a low-carbon future.