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FINANCING INITIATIVES

Kenya the beating heart of climate action

In Summary

• Africans have plenty of solutions for the environment and AFD, the first development agency to seek 100 per cent compatibility with the Paris Agreement on climate, can accelerate them

If asked about what on earth could best epitomise nature’s wonders, I would definitely choose the peaks of Mt Kenya and Mt Kilimanjaro. Two centuries ago, people would hardly believe mountains could have ice on their peaks, so close to the equator, and right in the middle of the tropics.

No evidence other than word of mouth was available at the time. Now there is little snow left up there. And the evidence is science-based. This is one of the most dramatic proofs that climate change is real.

Is there any hope of preserving this beautiful scenery for the generations to come? Yes, and Nairobi has set the beat of climate action this week. Presidents Kenyatta and Macron have just inaugurated the first edition of the One Planet Summit held on African soil just before opening the United Nations 2019 Environmental Assembly.

These twin events have showcased the latest transformational climate initiatives, startup pitches, and game-changing projects from leaders in the field. They have stepped up climate action on regional solutions for deploying renewable energy, protecting biodiversity, and boosting adaptation and resilience.

On this occasion, the call for action on forests preservation announced by President Kenyatta, the objective of €1.6 billion for adaptation already achieved by France, including €750 million in Africa in 2018 and the scaled-up up commitments for the International Solar Alliance demonstrated a growing support for climate action on the way to the G7 under the French presidency and the Climate Summit of September 2019 called by Antonio Guterres, UN secretary general.

Why here and now? Because Kenya epitomises African leadership in climate action. It is well ahead in its energy transition, with 98 per cent of its electricity production from clean sources (38 per cent hydroelectricity, 31 per cent geothermal, and 29 per cent thermal solar). It is also rich with innovative solutions that are good both for the climate and communities.

Take the project of Kenya Tea Development Agency that received funding from Proparco, the private sector lending arm of AFD, to instal mini-hydroelectric power plants for green tea leaf processing.

It will not only provide reliable clean energy to 24 of the factories managed by KTDA, but also reduce the energy costs by as much as 30 per cent and improve the efficiency of running these factories. This, in turn, translates into improved incomes for about 350,000 tea planters. Moreover, the project will also contribute to rural electrification.

This fits well with the broader picture of climate-smart innovations on the continent. Africans have plenty of solutions for the environment and AFD, the first development agency to seek 100 per cent compatibility with the Paris Agreement on climate, can accelerate them.

How? First, by working directly with the private sector. “Choose Africa” is our flagship €2.5 billion initiative. It is the one-stop shop for African entrepreneurs to access AFD’s financing, strategic advice and technical assistance, with a strong focus on environmental and social responsibility. Boosting SMEs growth and competitive edge can also benefit the planet!

Second, by reorienting financial flows towards climate-friendly investments – a core objective of the Paris Agreement. This is what we do together with TDB and 23 other national and regional development banks with IDFC, the largest provider of public development finance globally, totalling $4 trillion in assets, with commitments above $850 billion per year, of which $220 billion in green and climate finance.

This what we do for Kenyan and regional businesses, by providing TDB, a key player of the One Planet Summit and a long-standing partner in the region, with a $120 million credit facility targeting climate-oriented projects in key sectors (renewable energy, resilient infrastructure, energy efficiency, agriculture and more).

This is what we do when we support financial institutions locally to transform their lending practices in favour of climate smart SMEs in 17 countries (of which 16 are in Africa, including Kenya), with the €650 million “Transforming Financial Systems for Climate” project, funded by the Green Climate Fund.

Time for climate action is now. It brings very concrete benefits to people: Clean, affordable energy for families, green financing for entrepreneurs, the conservation of wildlife in national parks for all to see. AFD, the French platform of development policy, is committed to working hard with its Kenyan partners building on the powerful outcomes of this week, because we all want our grandchildren to be able to admire the beautiful peaks of Mt Kenya and Mt Kilimanjaro in the decades to come.

CEO, Agence Française de Développement (AFD), and chairman, International Development Finance Club (IDFC)