The Securities and Exchange Commission (SEC) has emphasised the need for mobilising capital markets to bridge the colossal financing gap for climate adaptation in Africa.
In a statement on Sunday in Lagos, Dr Emomotimi Agama, the Director-General of SEC, was quoted to have stated this while speaking on “The Role of Capital Markets in Closing Financing Gaps for Climate Adaptation” at the just concluded African Development Bank (AfDB) annual general meeting.
Agama urged project developers and private sector actors to present bankable, pipeline-ready projects with robust environmental and social metrics, to aid in closing financing gaps for climate adaptation.
According to him, African capital markets can achieve this through market integration, aligning standards, and adopting the International Sustainability Standards Board (ISSB) framework.
“Closing the climate adaptation financing gap in Africa is not a distant aspiration but a development imperative, and one that demands our collective ingenuity and capital.
“By integrating our markets, aligning standards, adopting the ISSB framework, and mobilizing institutional capital across borders, we can build a climate-resilient future for all Africans, ” he said.
Africa faced a significant climate adaptation financing gap, with an estimated annual shortfall of up to $100 billion by 2030.
The continent needed around $500 billion of climate finance by 2030, and over $3 trillion in mitigation and adaptation investments by 2030 to implement its Nationally Determined Contributions.
In 2017, Nigeria launched its sovereign green bond, the first in sub-Saharan Africa, which was oversubscribed by 2.5 times.
This demonstrated that local institutional capital could be mobilised for climate projects when the right instruments and confidence-building frameworks are in place.
The ISSB Standards served as a game-changer, and Nigeria is at the forefront of adopting these standards.
The SEC Nigeria represents the country on the ISSB’s Adoption Readiness Working Group, which finalized a roadmap for adoption, outlining early adoption, voluntary adoption, and mandatory adoption.
To scale adaptation finance, Dr. Agama urged deeper regional market integration, harmonised ESG standards, and deployment of tools like credit enhancements to de-risk early-stage climate investments.
He emphasised that closing the climate adaptation financing gap in Africa requires collective ingenuity and capital.
