After days of intense negotiations in Sharm el-Sheikh, history was made when countries at the latest UN Climate Change Conference, COP27, reached agreement on an outcome that established a funding mechanism to compensate vulnerable nations for ‘loss and damage’ from climate-induced disasters.
“This COP has taken an important step towards justice. I welcome the decision to establish a loss and damage fund and to operationalise it in the coming period,” UN Secretary-General António Guterres said in a video message issued from the conference venue in Egypt, underscoring that the voices of those on frontlines of the climate crisis must be heard.
Developing countries made strong and repeated appeals for the establishment of a loss and damage fund, to compensate the countries that are the most vulnerable to climate disasters, yet who have contributed little to the climate crisis.
In another milestone at the conference, the African Cities Water Adaptation Fund (ACWA Fund) was introduced by the World Resources Institute and partners with the goal of allocating $5 billion by 2032 to urban water resilience measures in 100 African cities.
City leaders will be able to directly access funding and technical support to implement cutting-edge solutions addressing a range of water issues, including integrated governance, watershed management, increasing sanitation services, improved storm water management, and wastewater management, thanks to the ACWA Fund, which was introduced at the Race to Resilience 2030 Climate Implementation Lab and its supporting coalition, the ACWA Platform, which was introduced at the Multi-Level Action Pavilion.
Guterres also reminded everyone of the need of maintaining the Paris Agreement’s 1.5 degree Celsius limit and pulling humankind “back from the climate cliff” as top priorities for addressing the climate crisis. The UN chief said that while a fund for loss and damage is essential, it’s not an answer if the climate crisis washes a small island State off the map – or turns an entire African country into a desert.
In addition to reiterating his appeal for a climate solidarity pact that he made in his opening remarks at COP27, he restated the need for just energy transition partnerships to speed up the phase-out of coal and scale up renewable energy sources. With a U.S.$66 billion backlog in infrastructure investment across the continent and U.S.$9- U.S.$14 billion needed each year to secure water sources, the resources required to satisfy these expanding requirements are enormous.
Sub-Saharan Africa has received less than 1% of the $100 billion in private investment dedicated to water infrastructure since 1990. The greatest method to enhance access to safe and sustainable water services and decrease cities’ exposure to water-related risks is to combine private financing with coordinated public sector funds, aid for climate and development, and other funding sources.
WRI is working with partners, including the African Center for Cities, ICLEI Africa, WaterAid, Resilient Cities Network, Arup, Cap-Net UNDP along with a strong steering committee with representation from key financial institutions and private sector investors, to develop a one-stop shop for African cities, offering full project lifecycle support.
The ACWA Fund will support local leaders to utilise the latest knowledge and resources to understand climate-water risks and socioeconomic impacts; identify, prioritise and prepare projects; structure deals and connect to grants and capital; and scale delivery by standardising project development manuals, deals and contracts, according to WRI.
Twenty three institutions have agreed to take action in support of the ACWA Fund by committing to offer rapid financing as well as technical help and knowledge development. These organisations come together to establish the ACWA Platform, which provides a centralised coalition of professionals and researchers to aid in the planning and development of projects. Stakeholders from the city will collaborate with the platform partners to create initiatives that are highly resilient and scalable and are ready for investment.
The ACWA Fund will help initiatives get off the ground by funding project preparation with grants, low-interest loans, and direct investments in the form of stock or subordinated debt. To assist in the implementation of resilient water solutions in 100 communities by 2032, the fund will provide U.S.$222 million in grants, U.S.$288 million in direct investments, and indirectly leverage U.S.$5 billion in further investments.
Together, the coalition’s goals are to increase 29 million people’s access to sustainable water services, conserve 137 million cubic metres of water, and add 64,000 jobs.