Climate Risk Management for the Energy Sector in Africa: The Role of the African Development Bank

Abstract

Africa, with its wide spread rural poverty, relatively high dependence on irrigated and rain fed agriculture and chronic energy crises, has of all regions the lowest capacity to adapt to a changing climate. Furthermore, impacts due to increased climatic variability are felt hardest on the continent. Adverse weather events such as droughts, floods, torrential rains and cyclones have significantly increased both in force and frequency over the last 20 years. Thus, the UN Development Programme (UNDP) and the World Bank estimate the cost of adaptation at $2–7 billion US per annum. Obviously, those costs exceed by far the currently available resources, available in the Global Environment Facility (GEF) adaptation funds. The four Funds amount together to US$250 million; whereby the envisaged adaptation fund as outcome of COP 14 is estimated to be at US$700 million. Henceforth, the African Development Bank actively engages the triple challenge of (i) Climate Risk Management both in project due diligent and country initiative level; (ii) Fostering clean Energy Development and; (iii) Increasing universal energy access by 2030. The key guiding strategic documents on both mitigation and adaptation are the Clean Energy Investment Framework as well as the Climate Risk Management and Adaptation Strategy. Furthermore, the Bank is building in both climate change areas staff capacity as well as Regional Member Countries (RMC) strength to develop best practice project designs. For instance, in the Banks energy sector department, holistic approaches, that consider climatological forecasts as well as early warning systems for enhanced dam and reservoir management are already being implemented. Finally, a major obstacle for Climate Risk Management in the African energy sector is its uniqueness in terms of under funding and often lack of sound operation and maintenance procedures. Extreme weather events, combined with the mentioned short comings in operations often result in disastrous consequences.