Unpacking the nexus between development finance and climate change

Africa is at a critical juncture in its development journey, where progress made is being increasingly offset by the impacts of climate change. To delve deeper into this complex issue, CNBC Africa spoke to Patricia Ojangole, the Chief Executive Officer of Uganda Development Bank. Ojangole highlighted the urgent need for more bankable projects to attract private sector investment and innovative financing models to bridge the significant gap in accessing climate finance across the continent. She emphasized the essential connection between finance and climate change, stressing the crucial role of massive capital investments in addressing the negative impacts of climate change while promoting sustainable development. One of the key challenges identified by Ojangole is the lengthy accreditation processes from implementing mechanisms like the Green Climate Fund (GCF) and the adaptation fund, which act as barriers to accessing climate finance. The tedious nature of these processes delays the flow of funds to crucial projects, hindering progress. Additionally, the limited project pipelines pose a significant challenge in attracting private capital. While public finance is available, mobilizing private investment remains a roadblock due to the absence of compelling projects. Ojangole advocated for innovative approaches and instruments to channel finance towards climate projects, highlighting the importance of creating a conducive environment for private capital to flow. At Uganda Development Bank, Ojangole shared the institution's proactive approach towards climate finance by establishing a dedicated climate finance facility. This special purpose vehicle focuses on mobilizing, deploying, and measuring the impacts of climate finance within their projects. The facility aims to provide financial and non-financial interventions to enhance project readiness and increase the pipeline of investment-ready projects. Ojangole's insights shed light on the importance of tailored financial solutions to address the unique challenges posed by climate change in the region. Looking ahead to COP28, Ojangole emphasized the significance of African leaders coming together to determine solutions that align with the continent's priorities. She underscored the need for African solutions for African problems, advocating for a tailored approach that addresses the specific needs of the region. Despite Africa emitting less compared to developed countries, it receives a disproportionately low share of climate funds, highlighting the importance of advocating for adaptation-focused priorities within the global climate discourse. In conclusion, the nexus between development finance and climate change in Africa presents both challenges and opportunities. By prioritizing innovative financing models, fostering private sector investment, and advocating for tailored solutions, the continent can unlock new pathways to sustainable development in the face of climate change.