A development advisory group, AfriCatalyst, has urged African leaders to develop a framework for issuing African Methane Abatement Bonds (AMAB). This urgent appeal was made at the latest launch of AfriCatalyst’s groundbreaking report that sheds light on the alarming surge in methane emissions across the continent and emphasised the need for immediate global action to mobilise the resources needed to address the environmental crisis.

According to the report, 19 African countries are responsible for 80 per cent of the continent’s methane emissions, with Nigeria, Sudan, the Democratic Republic of Congo, and Egypt contributing half of the total. The report reveals that methane emissions in Africa have risen at a yearly rate of two per cent from 1990 to 2022, contributing a staggering 14 per cent to the total global methane emissions. These emissions predominantly emanate from the agricultural sector (51per cent), energy production (35per cent), and waste management (14per cent).

While almost all African nations have outlined their Nationally Determined Contributions (NDCs), the lack of adequate financing impedes achievement of these goals. Only two per cent of global climate financing was allocated towards methane abatement last year, and Sub-Saharan Africa received a mere six per cent of global methane financing.

In the report, the report identified several avenues for boosting domestic and external financing for methane action in Africa. Its launch follows a high-level panel session held by AfriCatalyst in November, 2023, under the theme “Financing Methane Action in Africa.”

AfriCatalyst’s Chief Executive Officer, and co-author of the report, Daouda Sembene, said: “Financing methane action faces several challenges. The first relates to the limited awareness on methane abatement in Africa and how to finance methane abatement efforts across the continent. There is strong evidence that if we do have ambitious methane abatement objectives in Africa, certainly we will be able to make the continent meet its commitments under the Paris Accord.”

According to AfriCatalyst, a collaborative effort by the 19 top African methane emitters could unlock additional funding by leveraging available financing from various partners, including European Union (EU) grants which could total nearly 6.4 billion Euros under the Neighbourhood, Development, and International Cooperation Instrument – Global Europe (NDICI). Such financial support could be complemented by technical assistance from reputable institutions such as the African Development Bank (AfDB), International Monetary Fund (IMF), and the World Bank.

Recognising that additional financing alone will not suffice, AfriCatalyst is also calling for innovative solutions aligned with the continent’s realities and specific circumstances.

According to the International Energy Agency (IEA), the required spending needs for low-income and middle-income countries amounts to $6.8 billion, while the continent needs $15-20 billion to reduce energy-related methane emissions by 75per cent by 2030. Innovative strategies, including increased domestic revenue mobilization, leveraging philanthropic funds, and recycling Special Drawing Rights (SDRs) through multilateral development banks like the African Development Bank (AfDB), could fill the gap.

Executive Director for the Africa Group II, at the World Bank Group, Abdoul Salam Bello, said: “Africa is the least risky region to do investment – the default rate for financed projects is only 5.5per cent, the lowest in the world. We need to change the narrative of risk by harnessing digital technologies, exploring concessional funding, and establishing a one-stop shop for all investing instruments.”

Division Manager, Climate and Green Growth Development at African Development Bank Group, Dr. Al-Hamndou Dorsouma, said:”In 2022, the African Development Bank allocated 45 per cent of its budget financing to climate action, and we are committed to meeting the Paris Agreement targets by 2025 through applying greenhouse gas accounting tools to estimate methane emissions reduction from each of our projects.”

In its report, AfriCatalyst envisions the issuance of African Methane Abatement Bonds (AMAB) as a pivotal step towards mobilising innovative financing to support the formulation and implementation of methane abatement measures outlined in countries’ national plans.