55 the growth that Africa needs to end poverty and to assure all Africans fair opportunities, while moving towards net-zero emissions along contextspecific pathways, calls for strategic investments in climate mitigation technologies. This is particularly true of carbon-intensive sectors such as energy (where Africa has sizeable solar, hydropower, and wind potential, and where market growth on the continent and sale to the European market both represent significant revenue opportunities), transportation, industry, manufacturing, waste, as well as agriculture (both livestock and cropping). Technology and innovation will play an important role in harnessing these opportunities. The Bank recognizes that its investments must be increasingly aligned with the Paris Agreement, and its internal operations must also undergo updates to reduce its carbon footprint. Institutionally, the Bank has already announced that it will cease to invest in coal altogether. Over and above this critical first step, it must ensure that its investments accelerate the transition towards a cleaner, decarbonised future. The Bank will help advance African countries’ NDCs and LTSs (including development, implementation, review, progress-tracking, and updates, mainstreaming into national development plans, as well as policy and strategy support to ensure they contribute to the Paris Agreement’s temperature rise target); and ensure that new investments are ‘Paris Aligned’ by 2023 under the terms of Building Blocks 1 and 3 of the MDBs’ joint Strategic Framework for Paris alignment (in particular Building Block 1 on mitigation actions). The Bank will also support the achievement of the SDGs (including but not limited to SDG 13); and demonstrate consistency with all MDBs in the interpretation of Paris alignment — while accounting for the African context (in particular poverty alleviation needs), respective capabilities and different national circumstances (including the need for flexible approaches and processes in different national contexts). In doing so, the Bank will also keep in consideration its commitment to its just transition principles. Through the African Financial Alliance on Climate Change (AFAC), the Bank intends to raise awareness of the Paris Agreement and the need to move away from fossil-fuelled investments and investments that are prone to climaterelated risks; and encourage the entire African financial sector to invest in low carbon and climate-resilient assets. Climate finance data shows that the majority of climate finance is domestically sourced. Alongside international sources of private finance, African private finance can make a significant contribution to the continent’s climate finance needs. To give effect to its commitment to alignment with the Paris Agreement, the Bank will a. Achieve 100% alignment with Building Blocks 1, 2, and 3 (mitigation, adaptation, and climate finance) of the MDBs’ joint framework for alignment with the Paris Agreement by 2023, demonstrable inter alia through a mandatory requirement for projects to undergo Paris alignment screening before Board approval and transparent reporting through the entire project cycle. b. Make strong and visible efforts towards alignment with Building Blocks 4, 5, and 6 (countries’ strategy, engagement and policy development, reporting, and alignment of internal activities) by 2023, ensuring 100% alignment of all six Building Blocks by the end of 2025. c. Manage its portfolio to support a mid-century goal of global net-zero emissions by 2050, through policybased lending, in a manner that is informed by African countries’ LTSs and associated NDCs, and consistent with the Paris Agreement’s Article 4.1 (UNFCCC, 2015). To accelerate the development of Paris-aligned investments, and investments consistent with the African Development Bank’s Climate Change and Green Growth Policy, the Bank will a. Practice policy-based lending and prioritize climate adaptation investments in high-priority, climatesensitive sectors (as identified by African countries) within which greater resilience is crucial. The specific priority sectors may evolve based on African countries’ specific risk and vulnerability profiles. However, they will reflect economic sectors where loss, damage, and adverse consequences from climate change are measurably higher than others. Priority sectors will also be consistent with the IPCC’s periodic reports that highlight areas of greatest concern for climate change in Africa. b. Develop or update sectoral guidance on climate change adaptation project types to be prioritized in the investment pipeline. The guidance will reflect the IPCC’s definition of adaptation, the MDBs’ joint framework for alignment with the Paris Agreement, the MDBs’ Common Principles for Climate Change Adaptation Finance Tracking, the African Development Bank’s Just Transition principles, and the UN Agenda 2030’s SDGs. Such sectoral guidance will also provide direction on maximizing mitigation co-benefits where adaptation and mitigation are closely linked. They will include illustrations of potential non-exhaustive climate change adaptation projects, such as those listed below. The road to Paris alignment In Africa
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