Development finance institution the African Development Bank (AfDB) and the government of Canada on March 17 signed an agreement to formalise the Canada–African Development Bank Climate Fund (CACF), which is a transformative special fund aimed at providing concessional loans for climate change-related projects with a strong gender-responsive component.

The investment, with its strong gender footprint, recognised “the critical role that women need to play in climate action and supports their efforts to mitigate and adapt to the effects of climate change”, Canadian Minister of International Development Karina Gould said during a virtual signing ceremony on the sidelines of the Canada-Africa Clean Growth Symposium.

“Climate change is one of the most important challenges of our time . . . And, although we are all affected by it, we in Canada know that not everyone is affected equally . . . that means that vulnerable and marginalised people are bearing the brunt of this crisis,” she said.

As a concessional facility, CACF resources will be deployed in innovative low-carbon technologies, renewable energy, climate-smart agriculture, sustainable forestry, water management and climate-resilience projects. The fund will finance climate change-related projects in the AfDB’s regional member countries, including those that demonstrate a strong gender equality focus.

The empowerment of women and girls will be an objective across all concessional financing of the CACF, aiming at direct, measurable gender equality outcomes.

The fund will be capitalised through a combination of a C$122.9-million ($104.8-million) repayable contribution, aimed at providing concessional loans for both sovereign and non-sovereign operations plus a C$10-million grant contribution for complementary technical assistance. The AfDB will administer the fund.

AfDB president Dr Akinwumi Adesina said “in building back Africa, climate resilience is very important. This is why I’m delighted and thrilled with the Canada-African Development Bank Climate Fund that we are launching today.”

He thanked Canada for its tremendous support to the AfDB in terms of general capital increases, temporary callable capital, and the support that Canada has given to Africa through the AfDB.

“These resources help with adaptation. First, it is long-term financing and will provide long-term capital to the private sector and to the public sector. It also provides it at affordable levels for countries. What I like most about it is that it looks at multi-sectoral use of this financing. All these things are very important to support Africa in climate adaptation and mitigation,” Adesina said.

The AfDB’s financing for climate has increased fourfold from 9% of its total portfolio in 2016, to 36% by 2019, and it is on track to achieve its target of 40% of total portfolio by the end of 2021. It has committed to providing $25-billion in climate financing by 2025.

Canada, one of the AfDB Group’s key non-regional members, has participated in all its capital increases, including the 7th General Capital Increase, the replenishments of the African Development Fund, including the fifteenth replenishment of the fund, with a 7.5% increase in AfDB Units of Account terms. Canada has also contributed to numerous trust funds and initiatives managed by the AfDB Group.