The African Development Bank (AfDB) plans to allocate around $25bn under climate finance commitments for the period between 2020 and 2025.
AfDB president Akinwumi Adesina made the announcement at the One Planet Summit in Nairobi, Kenya.
Adesina also noted that the bank is on its way to reach the target of allocating 40% of its funding to climate finance by 2020. AfDB’s commitment to the target has increased from 9% in 2016 to 28% in 2017 and 32% in 2018.
The bank is also planning to launch the green baseload facility under the Sustainable Energy Fund for Africa to offer concessional finance and technical assistance to increase renewable energy capacity.
Canada, Denmark, Germany, Norway, Italy, the UK and USAID are donors that have shown interest in the initiative, which will also help to replace coal.
During the period 2016 to 2018, the bank allocated 95% of its investments in the power generation sector to renewable projects, which is in line with its New Deal on Energy for Africa.
Adesina said: “The required level of financing is only feasible with the direct involvement of the entire financial sector.
“Consequently, the Bank launched the African Financial Alliance for Climate Change (AFAC) to link all stock exchanges, pension and sovereign wealth funds, central Banks and other financial institutions of Africa to mobilize and incentivize the shift of their portfolios towards low carbon and climate resilient investments.”