The governments of Japan and Austria have approved a $1 million fund to strengthen the participation of the private sector in combating climate change.
The funding will be channeled to the Africa Private Sector Assistance (FAPA) grant, which aims to expand the role of the private sector in the Nationally Determined Contributions (NDCs) of African countries. NDCs are national efforts to reduce Greenhouse Gas emissions and form part of the Paris Agreement on climate change, according to a statement by AfDP.
The project will be implemented by the Climate Change and Green Growth Department of the African Development Bank. It is intended to engage the private sector, especially SMEs, in improving the integration of climate change measures in their investment decisions.
The Regional Member Countries (RMCs) selected for the implementation of the project are Egypt, Angola, Mozambique, Morocco, Nigeria and South Africa. The project is expected to contribute to green and inclusive economic growth in the target RMCs and enhance the capacity of SMEs, project developers and sponsors to scale up green investments that support NDCs. It will also help increase private sector investments that facilitate the implementation of NDCs in target countries. The project will address constraints to attracting climate finance, including lack of enterprise knowledge, and insufficient capacity in preparing green bankable projects.
FAPA is a multi-donor thematic trust that provides grant funding for technical assistance, as part of the Bank’s Private Sector Development Strategy. The governments of Japan and Austria and the African Development Bank are active contributors to the fund, which to date has provided over $68.58 million to 79 projects in 38 countries across the African continent. The FAPA portfolio includes regional and national projects that improve the business environment, strengthen financial systems, build private sector infrastructure, promote trade, and the development of micro, small and medium enterprises.