By Nneka Nwogwugwu
President of the African Development Bank (AfDB), Akinwumi Adesina, has revealed that the UK has agreed to guarantee $2 billion of the debt the African Development Bank has extended to African governments; allowing the bank to free up finance for climate-related projects.
He also informed during an interview as cited by Bloomberg, that the additional lending capacity will be used to fund projects for climate resilience and renewable energy.
The guarantees are a step toward meeting a financing gap that Africa needs to meet to finance the strengthening of infrastructure such as roads and bridges.
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NatureNews recalls that UK is considering guaranteeing at least $1 billion of South African debt as part of an $8.5 billion climate finance deal designed to cut the nation’s reliance on coal and drive a shift to green energy, citing people familiar with the situation.
Adesina also reiterated plans to help South Africa raise the $40 billion his bank estimates the country needs to transit from coal.
That plan, he said, would “leverage” off the $8.5 billion offered to South Africa by the UK, US, Germany, France and the European Union.
He said about $11 billion in grants, concessional finance and guarantees would be needed to give effect to the plan, which wouldn’t see South Africa incur more debt.
