42 African Business June 2021
Climate action which floods regularly during heavy equatorial rain. The city is heavily exposed to flooding and erosion, with landslides regularly claiming lives – one in November 2019 killed at least 40 people and displaced thousands more. DRC’s exposure to climate change is worsened by extreme poverty, environmental degradation and low adaptive capacity to extreme weather events. Soil erosion can also hurt farmers in surrounding areas, leading to lower crop yields and the destruction of critical infrastructure.
The Gap Fund will help the city identify and prioritise investments in nature-based solutions and the “greening” of public buildings, spaces and street design to reduce emissions, enhance resilience and improve liveability in low income neighbourhoods.
“The technical assistance was requested by the Kinshasa city administration. The specific activities include data collection and mapping to help identify the opportunities in terms of investments in naturebased solutions. Once the identification is complete, there will be a preliminary assessment of the cost and impact of these investments in terms of greenhouse
Top: A farmer walks among orange trees dried out by drought on Morocco’s southern plains of Agadir in the country’s agricultural heartland. Below: Ethiopians salvage their property outside their destroyed homes after the River Dechatu burst its banks and flooded the town of Dire Dawa.
gas emissions reduction, flood risk reduction, cooling, increased quality of life, and job opportunities,” says Maria.
Addis Ababa In the Horn of Africa, Addis Ababa is exposed to heat waves, drought, and flash floods. Due to its undulating topography, poor waste management and the absence of sustainable storm water management, the Ethiopian capital is particularly vulnerable to climate change. Watercourses flow through the city, which during the rainy season can flood and damage settlements along the banks.
“The World Bank team has done a lot of work with Addis on improving the way that they look at capital investment planning. Capital investment planning is this whole process where you try to plan ahead in terms of needs to build new infrastructure, aligned with the special development plan for the city. They [Addis] need to maintain existing infrastructure and the idea is to bring this to the next level by integrating the climate dimension into this capital investment planning process,” Maria says.
“Then it’s really trying to use this to develop a pipeline of climate smart investments,” he adds.
In the first round of funding, the cities will build their greenhouse gas inventory scenarios and develop a pipeline of green urban infrastructure investments.
Maria says support from the Gap Fund does not involve any commitment from cities to take a loan from the EIB or the World Bank. Similarly, neither the EIB nor the World Bank commit to provide loans to a project that has received Gap Fund support.
“In general, by helping cities turn their climate ambitions into finance-ready projects, the Gap Fund is expected to provide financiers, including the EIB and the World Bank, more opportunities to increase their climate-finance flows towards cities,” says Maria.
“The World Bank has recently presented a new 2025 climate action plan which significantly increases the institution’s climate finance targets. Cities will play an important role, and the Gap Fund is one of the initiatives expected to contribute in achieving these increased targets.”
The EIB is also stepping up its investments in climate action, both inside and outside the EU. In November 2020, the Luxembourg-based bank approved a €1 trillion green investment package to be spent by 2030. As part of the pledge, from the start of 2021, all new EIB operations will be aligned with the Paris Agreement. In 2020 alone the bank provided €5bn for new private and public investment across Africa.
The team behind the Gap Fund hopes these city pilots will provide a blueprint on how to lower greenhouse gas emissions in cities and help them face climate change. There has been strong interest from African cities in the fund, Macagno says, and the institutions have been working with local officials to encourage more cities to apply for funding.
Macagno points out that many cities mentioned Covid-19 in their expressions of interest. “They are targeting climate projects but they are very much in line with this ‘build back better’ idea and they mentioned Covid as exposing some of the weaknesses of the municipalities, and they would like to react to that. That is a very positive sign.” n