EIB provides EUR 5 billion investment as 80% of African banks consider climate risk
The European Investment Bank (EIB) provided more than EUR 5 billion of new financing to support more than EUR 12 billion of transformational private and public investment across Africa in 2020.
This includes, launching new targeted financial initiatives in collaboration with African banks and financial institutions to help businesses recover from COVID-19 challenges, accelerating climate finance, improving access to finance by female-led businesses and enhancing financing for rural smallholders.
EIB made this known in its The Finance in Africa 2021 report, which was unveiled at the weekend, during a webinar. The report surveyed 78 leading banks and financing institutions, which are active across sub-Saharan Africa (SSA), examined the impact of the pandemic on banking and business lending, investigated how Africa’s financial sector is harnessing the digital revolution and detailed the challenges and opportunities of green finance for banks.
In the report, EIB said African banks recognise climate change risks and climate finance opportunities, with a survey revealing that African banks are increasingly aware of the need to address risks posed by climate change, and are beginning to take advantage of opportunities in green finance.
According to the bank, 54 per cent of surveyed banks were already viewing climate as a strategic issue while over 40 per cent have staff working on climate-related opportunities. Other financial institutions, including microfinance and private capital and insurers, are also filling market gaps in green finance.
EIB Vice President, Thomas Östros, said Africa’s banks are crucial for ensuring access to finance, which is essential for private sector growth and climate action.
Ostros said they also understand the unprecedented challenges triggered by the COVID-19 pandemic, “the European Investment Bank is committed to supporting transformational private and public investment across Africa in close cooperation with financial sector partners.
“The feedback from 78 leading African institutions contained in the Finance in Africa 2021 report is invaluable. It shows both the resilience of Africa’s financial sector and enthusiastic engagement to embrace digitalisation. At the same time, the report indicates future risks that could hinder financing for business growth, renewable energy and recovery from the pandemic.”