The African Guarantee Fund and the Clean Cooking Alliance challenge the banking sector to invest in carbon markets

by MMC
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The workshop follows the African Climate Summit which brought together the main global players in the sector Nairobi. António Guterres, the Secretary-General of the United Nations, told the conference: “Africa is home to 60 percent of the world’s best solar resources, but only 2 percent of global investment in renewable energy over the past two decades. Now is the time to bring together African countries, developed countries, financial institutions and technology companies to create a true African Renewable Energy Alliance. »

Much of the attention on green and sustainable finance focuses on mitigating climate risks, but the untapped potential of banks to maximize opportunities through climate action is often underestimated. Faced with increasing pressure from customers, shareholders, investors and regulators, banks are forced to align their business strategies and lending criteria with environmental, social and governance standards.

Speaking at the workshop, Mr. Patrick Lumumbadirector of capacity development of the AGF Group, highlighted that “carbon projects have become essential for channeling funds between various sectors of the economy, accelerating transitions towards a sustainable future. However, banks often lack comprehensive data to assess the risks and returns associated with carbon projects. They also lack information on effective market entry strategies, growth-oriented business models, risk management, and prudent portfolio construction practices.

“Today’s workshop is a clear example of AGF’s capacity development efforts in action to enable the banking sector to venture into carbon markets by increasing financing for clean cooking projects. Prioritizing this sector has a direct impact on several Sustainable Development Goals such as gender equality, good health. and well-being, and even climate action.

Mr. Faisal HusseinSenior Director of Innovative Finance at CCA, highlighted that “banks are key to realizing the full potential of carbon markets by helping to fill the financing gap needed to launch and scale carbon projects. the lives of people who currently lack access to clean cooking fuels and technologies.

“The new Clean Kitchen Funding Partnership Platform is key to this effort because it brings together several distinctive capabilities: CCA’s clean kitchen convening capacity and technical expertise; AGF’s emphasis on Africa and reduce investment risks, with a commitment to green finance; and UNCDF’s financial mandate for emerging markets,” he added.

About African Guarantee Fund: The African Guarantee Fund (AGF) is a non-bank financial institution whose objective is to promote economic development, increase employment and reduce poverty in Africa. Africa providing financial institutions with guarantee products and capacity development assistance specifically aimed at supporting SMEs in Africa.

AGF was founded by the government of Denmark through the Danish International Development Agency (DANIDA), the Government of Spain through the Spanish Agency for International Cooperation and Development (AECID) and the African Development Bank (AfDB). Other shareholders include the French Development Agency (AFD), the Nordic Development Fund (NDF), the Investment Fund for Developing Countries (IFU) and the KfW Development Bank.

AGF is rated AA- by the Fitch rating agency.

About Northern Development Fund: The Nordic Development Fund (NDF) is a multilateral development finance institution created in 1988 by the Nordic countries (Denmark, Finland, Iceland, NorwayAnd Sweden). The NDF provides grants and concessional loans for activities related to climate change and development in developing countries.

About Clean Kitchen Alliance: The Clean Cooking Alliance (CCA) works with a global network of partners to build an inclusive industry that makes clean cooking accessible to the 2.3 billion people who live without it every day. Established in 2010, CCA drives consumer demand, leverages investment to create a pipeline of scalable businesses, and fosters an enabling environment that allows the sector to thrive. A clean kitchen transforms lives by improving health, protecting the climate and environment, empowering women and helping families save time and money.

About Kenya Bankers Association: The Kenya Bankers Association (KBA) is the umbrella body of the banking sector and represents the interests of the sector in Kenya. KBA was founded July 16, 1962with a current workforce of 47 banks.

Media contact

Diana Aluga, African Guarantee Fund, +254 732 148 000, (email protected), https://africanguaranteefund.com

SOURCE Clean Kitchen Alliance

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