Climate Finance Insights for Cities: Development Bank of Southern Africa

We interview experts in the field of climate finance to share insights on how cities can access finance for sustainable, resilient development. In this video, Olympus Manthata from DBSA is interviewed by ICLEI Africa’s Rebecca Cameron.

Highlights from this video

Development Finance Institutions (DFIs) play a critical role in unlocking climate finance. These institutions assist with two key factors: pulling in private investment and ensuring the regulatory environment is ideal for implementation of projects.

When looking at the expectation that is placed on the private sector, in many cases depending on the sector, there are regulatory or policy-related barriers. DFIs like the DBSA are usually government-owned and therefore one can assume that, due to proximity, DFIs would be able to influence things around the policy and regulatory issues, to some extent.

On the other hand, DFIs are also co-funding with the private sector and commercial banks so one could argue that these institutions understand the issues expected, for example, the risk-return profile financiers will be comfortable with. 

Challenges to unlocking climate finance brought on by Covid-19 and how to work around them

One of the immediate impacts was liquidity constraints, as a DFI, one of the immediate impacts we have felt is liquidity constraints. In many cases that constraint leads to the cost of funding sky-rocketing. In the municipal space resources may be diverted to other, or ‘more urgent’ matters.

The question then becomes: what is the best way to respond, in the midst of these challenges? What remains useful is access to appropriate financing instruments as well as the ability to channel the concessionally that they are receiving from sponsors in order to make the implementation of projects possible.

 In the process it is also important to keep reminding ourselves that the climate emergency should not be a casualty of the challenges we see emanating from the Covid-19 pandemic.

How can LoCS4Africa 2020 virtual congress move the conversation on city climate finance forward?

“Be able to identify the barriers and from those barriers try to look at solutions that are in place, but do it in a way that we revisit case-studies or specific initiatives that are being implemented.

 For example, from the DBSA, if you think about the facilities that we have put in place – there’s a lot of celebration around approval of funds and having them in place – but translating those funds and facilities into projects on the ground becomes something else.”

Olympus Manthata, DBSA
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