ACS 2023: Private sector investment steals the show at Africa Climate Summit

As the Africa Climate Summit gets underway in Nairobi, it is becoming increasingly evident that this conference's key focus will be on one main issue and one issue only: hard cash.

While previous high-profile, UN-backed climate conferences were largely about the role of developed countries vs developing markets, or focused on the reduction of emissions, host Kenya takes a much more private sector-focused approach. 

The pro-business government of the country's President William Ruto (pictured) has set its eyes firmly on private investor capital as the billions of dollars, euros and pounds in firepower that is held by large asset owners in developed countries seem to take centre stage.

Following a call to investors earlier today from the assistant secretary for International Trade and Development at the U.S. Department of the Treasury, Alexia Latortue, arguably the highest-ranking U.S. official at the summit, to "unlock" large amounts of capital by "mobilising private finance", it was president Ruto who directly addressed investors around the world.

The relatively new president, only in office since last year, urged capital owners to reconsider their current investment strategies and reallocate billions to explore investments in renewables and infrastructure, particularly across Africa.

He stressed investors outside Africa should no longer see the continent as a problem but as a a lucrative opportunity.

"The overarching theme is the unparalleled investment opportunity that climate action represents, also for Africa. For a long time we have looked at this as a problem," Ruto told hundreds of delegates in central Nairobi.

"It is time we flipped and look at it from the other side."

"We must see and think in green growth, not just a climate imperative but a fountain of multi-billion dollar investment opportunities that Africa and the world is prime to capitalise," Kenya's president said.

Ruto is convinced Africa can become entirely energy self-sufficient through the rollout of renewable energy solutions, provided investors come on board. 

Kenya has set itself the ambitious goal of aiming to "be 100% renewable" within seven years.

Carbon credit deal

Ruto's remarks came as he announced the largest carbon credit deal ever in Africa. In order to boost the continent's carbon credit production nearly 2-fold before 2030, the Kenyan president confirmed pledges of hundreds of millions from a range of different actors.

The United Arab Emirates, host of COP28 later this year, confirmed it will acquire $450 million of carbon credits from the Africa Carbon Markets Initiative.

Launched during COP27 in Egypt last year, the ACMI aims to drive market-based financing instruments such as carbon credits, allowing heavy emitters to offset their pollution via various projects, such as planting trees or renewable energy investments.

Close to 30,000 delegates are in Nairobi this week for the summit, with dozens of side events taking place, covering a range of topics, from climate justice to private sector investment and climate security.

But the need for cash to firepower the green investment is rapidly turning into one of the key themes.

A draft version of the final declaration, expected to be announced on Thursday, places investments in renewable energy investments centre stage, as well as biodiversity and nature assets.

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ACS 2023: Asset owners urged to embrace green investments in earnest by ‘unlocking’ trillions