Addis Ababa November 10/2022/ENA/ COP27 and the United Nations Economic Commission for Africa launched today “Reducing the Cost of Green and Sustainable Borrowing” initiative in climate-vulnerable countries at the UN’s 27th annual Conference of the Parties.
The initiative launched at the conference aimed at addressing the larger issues of deteriorating fiscal health under threat by potential output losses linked to climate hazards and disaster recovery costs, as well as transition risks that may hit the economy at large, according to COP27 official website.
During the launch of the initiative it was indicated that liquidity constraints remain some of the foremost barriers to allow African countries to invest towards climate resilience and the Sustainable Development Goals.
This initiative will help build deeper, resilient, and sustainable financing to accelerate its post-Covid green recovery through various mechanisms.
It is also expected to strengthen the ability of African states to borrow at an affordable rate, mobilize more green funding, and attract private capital.
African countries can lower green borrowing costs by pulling various levers, the COP 27 officials stated.
Some of its programs include Liquidity and Sustainability Facility (LSF), Harmonization of ESG Standards, Proposal of a Sustainability Sovereign Debt Hub (SSDH) among others.
COP27 is underway in Sharm El-Sheikh, Egypt from 6-18 November.
At COP 27, countries come together to take action towards achieving the world’s collective climate goals as agreed under the Paris Agreement and the Convention.