NDF approves a grant to boost green bonds in Africa
In early April, NDF has given a green light to support the design phase of the Green and Resilience Debt Platform with a booster grant of EUR 500,000 to address climate financing gaps in Africa. The new initiative aims to unlock climate finance through green bonds.
Green bonds keep showing positive potential to address the climate financing gaps that are needed to tackle climate change globally. However, out of all globally issued bonds in 2021, only 5.8% were green bonds, and Africa accounted for only 0.077% of issuances.
“NDF is committed to supporting Sub-Saharan Africa in addressing climate change, and our aim is to allocate 60% of our financing to the region. We welcome the Green and Resilient Debt Platform as a new tool to unlock climate financing at scale. An impactful combination of support to investment readiness, financial de-risking together with technical assistance has the potential to engage the private sector in providing critical climate resilient solutions for the development of local and regional green debt ecosystems. We will continue to work with our partners to find the best synergies in this shared challenge,” said Karin Isaksson, Managing Director at NDF.
Bringing partners together for a climate resilient Africa
Africa, especially Sub-Saharan Africa, is already heavily affected by climate change and climate financing gaps need to be urgently filled. International development finance institutions and organizations play a crucial role in filling the green financing gaps, supporting the issuance and investment in green bonds in least developed countries (LDCs). This means providing technical assistance and acting as cornerstone or junior investors in sovereign as well as corporate green bonds.
To boost the use of green bonds, NDF, together with UNDP, UNCDF, the European Investment Bank (EIB), Green Climate Fund (GCF) and the European Union’s Global Green Bond Initiative (GGBI) are collaborating with African countries to design and establish a Green and Resilience Debt Platform for Africa and LDCs.
The Platform will provide a combination of investment readiness and financial de-risking support to participating countries and create an enabling investment environment.
The EUR 500,000 NDF Booster grant will finance the GRDP preparatory work in three out of seven target countries in Sub-Saharan Africa, Angola, Cameroon and Uganda, together with UNDP and UNCDF, pending finalisation and entry into force of related contractual arrangements. EIB together with GCF will finance the GRDP project preparation work in the other four target countries, Cote d’Ivoire, Namibia, Rwanda and Senegal.
Read more on UNDP's press release here.
NDF Managing Director Karin Isaksson in New York announcing NDF’s decision to support the Green and Resilient Debt Platform