COP26 - Tackling climate adaptation in Africa with scalable solutions

man loading vegetables onto a truck

At the upcoming COP26 event, the Dutch Fund for Climate and Development (DFCD) will present three selected applicants from the Scalable Climate Solutions Challenge launched at the beginning of this year.

We speak to Mr. Tigere Muzenda, the DFCD Programme Manager in Sub – Sahara Africa, to learn more about Climate Financing and the recently concluded Sustainable Climate Solutions Challenge. We find out the critical factors the team looked at while selecting the finalists with a focus on Sokofresh, a Kenya-based company. This company installed the first-mile solar-powered cold storage to help smallholder farmers take their businesses to the next level, address the issue of food loss, and increase the farmers' incomes, among other objectives.

What is climate financing, and why is it a keyword in the upcoming COP26 event?

According to the UN Framework Convention on Climate Change (UNFCCC), "Climate finance refers to local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation activities to address climate change. "

Climate finance is a topical issue at the upcoming COP26, but it has been equally crucial in previous COP meetings. Unfortunately, many less developed countries and small island nations lack the financial resources to prepare for and cope with the impacts of climate change.

With climate risks worsening and a need for an ever-increasing amount of money to alleviate the challenges, climate finance is essential for mitigation and adaptation; hence a gathering like COP26 is the correct forum to discuss how to mobilise the required funding.

Climate finance is essential for climate change mitigation because large-scale investments are required to reduce emissions significantly. Climate finance is equally necessary for adaptation, as significant financial resources are needed to adapt to the adverse effects and reduce the impacts of a changing climate.

Climate change adaptation versus mitigation is there a difference?

Climate change mitigation aims to tackle the causes and minimise the possible impacts of climate change, such as reducing the emission of greenhouse gases. On the other hand, Climate Change Adaptation considers how to minimise the adverse effects caused by climate change and how to change systems to continue to live and do business in the "new normal" – that is, building resilience and anchoring sustainability.

Is the African market ready for climate financing?

Climate financing comes in different forms and uses a variety of instruments.

As mentioned earlier in the definition of climate finance, it could be local, national, or transnational financing drawn from public, private and other alternative sources, depending on the nature and scope of activities in need of such finance.

To that extent, Africa has utilised climate finance in one form or another, as depicted by African green projects funded through climate finance in the last decade or so, such as

  • The Kasigau Corridor REDD+ Project in Kenya, a pioneer in wildlife conservation, protects over 200,000 hectares of dryland forest with over 11,000 wild elephants.

  • A clean, renewable energy project, Lake Turkana Wind Power in Kenya, with a total installed capacity of 310MW.

  • Off-grid solar projects in Rwanda financed by the Global Climate Fund (GCF).

  • GCF-funded Ghana Shea Landscape Emission Reductions Projects prevent further deforestation, forest degradation and the loss of valuable shea trees.

That is not to say Africa's Climate Finance markets are fully developed and of international standards as yet, – but to show that Africa has always been ready for climate finance of the suitable typology using appropriate instruments within its prevailing context. Africa's financial markets are underdeveloped, lack depth and are still considered very risky. Consequently, climate deals are few and far between.

What is the Scalable Climate Solutions Challenge?

It was a call to private sector companies with a climate change investment concept to apply for grant funding and technical assistance to implement Origination (de-risking) activities that will lead to the implementation of the concept. The challenge fund was led by FMO and run in Bangladesh, Kenya, and Uganda to select one winner from each country. The winner will be awarded a grant of up to Eur 350,000 and consideration of a loan facility for the investment.

How did you select the winner?

We received a total of 51 applications, of which 42 were rejected upon first screening. At the same time, the remaining nine were eligible and continued to the assessment stage for suitability (commercial and financial viability). The business cases were ranked and dropped until the most promising commercially viable, climate change inclined, innovative and impactful one was selected, SokoFresh.

What is the unique factor that won the heart of the selection panel?

  • SokoFresh innovative mobile cold chain concept uses clean, renewable energy, which aligns well with climate change adaptation.

  • Deployment of cold chain at farm level to help boost post-harvest management and prevent food losses.

How will you continue to work with SokoFresh Post Cop 26?

The Challenge Fund and DFCD will continue to ensure Origination activities are implemented as envisaged and that the business case graduates to commercial funding under the Land Use Facility.

What would you say to Agribusiness entrepreneurs in Africa?

Time is ripe for agriculture to be taken as a serious business just like in manufacturing and the services industry and therefore should have professional, corporate operational, management and governance structures, including budgeting, financial and marketing management.

Entrepreneurs should endeavour to implement Climate Smart Agricultural practices.

What are you hoping to see as an achievement at COP26?

I hope that some of the resolutions will promote digital technologies that will enhance connectivity to accelerate climate action. I would like to see more balanced public and private collaboration and contribution towards climate action and funding. And finally, collaboration among businesses and civil society.

For further information, please contact Tigere Muzenda, DFCD Programme Manager in Sub – Sahara Africa.