The African Development Bank On 'Green Growth'

The African Development Bank's new policy acknowledges that to sustain economic growth in Africa, there is an urgent need to preserve and enhance the ecological capital that enriches such growth.

The AfDB's environmental policy has two overall goals which are two-fold: firstly, to help improve the quality of life of the people of Africa; and secondly, to help preserve and enhance the ecological capital and life-support systems across the continent of Africa.

The development of the policy has been driven by a number of factors, including the recognition and acceptance of sustainable development as the dominant development paradigm for the 21st century; need for a greater focus on pro-poor growth policies and programmes to counter unacceptable impoverishment rates; rapid progress in the inevitable integration of Africa in the globalization process; and the need for an improved governance with a clearer commitment of the majority of African governments to provide the necessary leadership for sustainable development. The policy recognizes the considerable constraints facing Africa but also its endowment with minerals, rich flora and fauna as well as large tracts of rainforest.

To help implement the policy, the Bank leverages the considerable progress made in developing appropriate tools for effective mainstreaming of environmental sustainability issues in its operations. This includes using a set of approaches, developing and strengthening procedures and guidelines, with particular focus on the full enforcement of the Environmental and Social Assessment Procedures for all lending operations of the Bank.

In a statement issued on its Green Growth policy AfDB said the main goals of the new policy are to:

 • Promote a long-term view and perspective of economic and social development;

 • Reverse where possible and halt the impoverishment process in Africa by enhancing the access of the poor to environmental resources;

 • Help Regional Member Countries (RMCs) to build their environmental management capacity and sensitize policymakers on environmental issues and bring about institutional changes to achieve sustainable development;

 • Reinforce the existing partnerships with international institutions and network also with regional and sub regional organizations to coordinate interventions in environmental sustainable development.

The Bank developed an Implementation Plan to execute its new Policy on the Environment as it seeks to ensure that a strong and diversified economy will continue to take account of environmental protection, and to guarantee that all developmental decision-making integrates economic, social, and environmental considerations. In addition, the Plan aims to ensure that environmental management tools, like strategies and project level environmental and social assessments, will be used systematically to monitor environmental performance and encourage community involvement.

With regard to sustainable energy development, the Bank has identified the need to refocus its instruments and policy to deliver sustainable, reliable and environmentally friendly energy through replicable and scalable mechanisms to promote the exploitation of available energy resources (renewable and non-renewable); widening energy accessibility for poverty reduction; mobilizing additional financial resources; capacity building; strengthening strategic partnerships and synergies; and increased focus on climate change adaptation.

With assistance of a grant by the Dutch government, the Bank implemented the Finesse-Africa program on mainstreaming renewable energy and energy efficiency. The overall goal of the Finesse-Africa Program is to assist countries in Africa, to work through the Bank, in formulating the appropriate policy and regulatory frameworks and developing capacity to generate a pipeline of investment projects in renewable energy and energy efficiency. This is achieved through:

 • Encouraging the promotion of supportive sustainable energy policies at country and regional levels;

 • Reducing the transaction costs of investing in sustainable energy systems through providing resources for pre-investment studies;

 • Improving capacity within the RMCs and the Bank to evaluate sustainable energy systems; and

 • Operationalising alternative energy and energy efficiency in the Bank's projects and programs through updating the energy sector policy and the subsequent development of a renewable energy and energy efficiency strategy and guidelines

The Bank recognizes the high value of the partnership with the Global Environment facility (GEF) as this provides substantive opportunities to blend Bank lending for development projects (baseline financing) with grant and concessionary financing from GEF resources to protect the global environment in the areas of biodiversity, climate change (including adaptation), land degradation, international waters, ozone layer depletion and persistent organic pollutants.

Over the past 10 years the Bank has become a GEF executing agency with direct access to GEF full project resources. Direct access to GEF project resources enables the Bank to (i) identify, prepare, appraise, and implement GEF projects on behalf of GEF; (ii) submit full project proposals for GEF financing directly to GEF without going through an implementing agency; and (ill) receive project grants directly from GEF and be directly accountable for their use.

In January 2004 the AfDB Boards approved its new Bank Group Policy On The Environment, which incorporates and redefines environmentally sustainable development in Africa. Two guidelines relevant to the new Policy on the Environment were completed and disseminated, namely the Strategic Impact Assessment Guidelines (SIA) and the Integrated Environmental and Social Assessment Guidelines (IESA).

SIA is also a tool for assessing social and environmental sustainability of policy-based lending, structural adjustment, and sector investment lending while its IESA Guidelines, on the other hand, are designed to ensure that both environmental and social issues are mainstreamed in Bank projects.