Smart policy reforms and innovative business models can unlock the trillions of dollars in private investment that is needed to ensure Africa meets its climate targets as agreed to in the landmark Paris Agreement.
The private sector, boasting innovation, the financing and resources, is considered to be the key to fighting climate change.
“Already, more than $1-trillion in investments are flowing into climate-related projects in these areas. But trillions more could be triggered by creating the right business conditions in emerging markets,” said International Finance Corporation (IFC) CEO Philippe Le Houérou on Thursday.
Government reforms and innovative business models will create new markets and attract the necessary investment and ultimately fulfil the pledge made in the Paris Agreement.
“African private businesses have the opportunity to become regional and global leaders in promoting climate-friendly projects. New approaches to business can unlock significant funds for climate finance that the IFC and other lenders are eager to support,” added IFC country manager for Southern Africa Saleem Karimjee.
The latest ‘Creating Markets for Climate Business’ report, released on Thursday, outlined seven industry sectors that can make a crucial difference in catalysing the required private investment.
These included renewable energy, off-grid solar and energy storage, agribusiness, green buildings, urban transportation, water and urban waste management.
The report noted that renewable energy investments are likely to reach a cumulative $11-trillion by 2040, with investments in off-grid solar and energy storage likely to reach $23-billion a year by 2025.
Investments in green buildings could reach a cumulative $3.4-trillion by 2025 in key emerging markets and investments in water supply and sanitation could exceed an aggregate $13-trillion by 2030.