Statement by Dr. Akinwumi A. Adesina President, African Development Bank Group Governors’ Dialogue Annual Meetings 2023 Sharm El Sheikh, Egypt 24 May 2023

25-May-2023

The Chairman of the Board of Governors,

Honorable Governors,

Executive Directors,

Senior Management and Staff of the African Development Bank,

Representatives, and members of the delegation of our shareholders,

Ladies and gentlemen.

Good morning!

I am delighted to welcome you all to this Governors' Dialogue at the 2023 Annual Meetings. Like you, I always look forward to the Governors' Dialogue at our Annual Meetings.

The Governors' Dialogues offer excellent opportunities to interact and engage with you as our shareholders, discuss and debate contemporary issues that affect or should shape the work of the Bank, new and emerging challenges, and opportunities, and how the Bank can effectively respond to them.

Your guidance has always helped us in our drive to accelerate the development of Africa.

Our focus at these Annual Meetings is on climate change and green growth. Given that energy, food security and climate change are interlinked, this year's Governors' Dialogue will be on 'Energy Access, Climate Adaptation, and Food Security'.

As you know, these areas are all part of our High5s, especially Light up and Power Africa, Feed Africa, and our cross-cutting theme on climate resilience and green growth.

I will now provide contexts on these three areas to motivate our discussion.

Energy:

Africa, with 15% of the global population accounts for just 6% of total global energy consumption and 3% of electricity. Close to 600 million people in Africa do not have access to electricity, and about a billion people lack access to clean cooking energy.

Over the past seven years, our investments have helped to connect 20 million people to electricity; we have helped to generate 3,300 MW of electricity, of which 2,400 MW are renewable sources. The Bank's work has also led to the construction of 7,744 km of transmission lines, of which 3,700 km are regional interconnections, and 75,000 km of distribution lines.

The percentage of Africans with access to electricity since we launched our New Deal on Energy has expanded from 43% to 56%.

However, a lot still needs to be done.

To achieve universal access to electricity will require a threefold increase in connections to electricity to 90 million per year. We will also need to shift 130 million people annually away from dirty cooking energy.

We need bolder approaches that work at scale, and which can reach hundreds of millions of people. The Bank's $20 billion Desert-to-Power initiative will develop 10,000 MW of solar power for eleven countries, including the Sahel and provide electricity for 250 million people. It will be the largest solar zone in the world when completed.

As we reflect on how to achieve universal access to electricity and energy, we cannot avoid discussions on the role of natural gas.

The reality is that universal access to electricity and energy in Africa cannot be achieved exclusively with only renewable energy. That is because of the high variability of renewables and the lack of storage capacity. African countries also need to have stable grids to deliver power for industries.

Therefore, natural gas has a role to play in Africa's energy mix, even as we focus on energy transition. Estimates have shown that if Africa tripled its existing gas power generation capacity overnight, it would only contribute no more than 0.67% to global emissions. We should note that African countries have natural gas in their Nationally Determined Contributions.

I expect that as we ramp up support for renewables and combine this with natural gas, where applicable, Africa will be able to achieve its goal of universal access to electricity, while reducing the effects of pollution from reliance on heavy polluting diesel, as well as charcoal and fuelwood, which currently are the major sources of carbon emissions in Africa.

The Bank is investing in more than just power generation, transmission and distribution, but also, in improving the performance of power utilities, through our Africa Energy Regulatory Index, which has proven to be such an effective tool for regulation that together with the World Bank, we have now launched the Global Electricity Regulatory Index that is used for the rest of the world.

We are also supporting better policy environment for private sector investments in the energy sector through the African Energy Market Place that brings governments, the private sector and development partners together to resolve challenges in the enabling environment.

Food Security:

Africa has 65% of remaining arable land globally to feed nine billion people by 2050. Yet the continent imports over 100 million metric tons of food annually at the cost of $75 billion.

More than half the population faces food insecurity. Today, over 280 million Africans go to bed hungry each night, accounting for 40% of the hungry people in the world. SDG2 on Zero Hunger will not be achieved unless it is achieved in Africa.

Africa has the potential to feed itself. It can do more: it has the potential to feed the world. Only 10% of its vast savannahs, covering 400 million hectares, are cultivated.

By removing barriers and attracting investments, the size of the food and agricultural market by 2030 could be worth over $1 trillion.

Raising agricultural productivity is crucial for closing the yield gap with the rest of the world. In this regard, the Bank's flagship program-Technologies for African Agricultural Transformation (TAAT)-is rapidly transforming food production. In the past five years, it has provided 11 million farmers and increased crop production by an estimated 25 million tons of additional food, with high yielding and climate resilient agricultural technologies.

Heat tolerant varieties provided to Ethiopia helped it to become self-sufficient in wheat production within just four years, cultivating over 1.6 million hectares under these varieties by 2022.

Our Africa strategy has deployed $7 billion in the continent's agricultural sector and helped to provide 83 million people with improvements in agricultural practices for food security.

The Bank investments cover short, medium, and long-term.

To avoid a potential food crisis in Africa from the Russian-Ukraine war, the Bank launched a $1.5 billion Africa Emergency Food Production Facility, with support also from Norway, Netherlands, Japan, and the U.S. The facility is currently supporting 20 million farmers in 36 countries to produce 38 million metric tons of food valued at $12 billion.

To build on this towards medium-and long-term investments, the Bank organized a Feed Africa Summit in Dakar in January 2023. The Summit, which was attended by 34 Heads of State and Governments and the President of Ireland, and development partners from around the world, was a huge success.

The food and agricultural delivery compacts developed at the Summit will allow the scaling up of agricultural interventions to achieve food security in Africa within five years.

The Bank worked very closely with multilateral and bilateral development partners, as well as the private sector, from around the world.

I am delighted that collectively we have mobilized $72 billion towards accelerating agricultural transformation on the Continent.

To improve food processing, value addition and competitiveness of agricultural value chains, the Bank is investing in the development of Special Agro-industrial Processing Zones.

These are new economic zones in rural areas enabled with density of infrastructure and logistics to support food and agribusinesses to locate close to farmers and process and add value to agricultural commodities.

The Bank and its partners have invested over $1.5 billion in developing these zones in 11 countries. The demand of African countries for the Special Agro-industrial Processing Zones is very high. This is exciting and very encouraging!

Climate Change:

Africa is being devastated by climate change. It loses $7-15 billion every year due to climate change, which is projected to rise to $50 billion by 2030. Africa's cumulative climate financing needs are estimated at $2.7 trillion between 2020 and 2030. Climate adaptation costs are estimated between $249-$407 billion over the same period.

However, Africa receives only 3% of global climate finance or about $30 billion per year.

The African Development Bank is mobilizing climate finance for Africa. We have surpassed our goal of devoting 40% of our total financing to climate. We now stand at 45%. Similarly, we have exceeded (for five years now in a row) the parity between mitigation and adaptation. Today, the Bank devotes 63% of its climate financing to adaptation, the highest among all multilateral development banks.

To do more, we launched the African Adaptation Acceleration Program, together with the Global Center on Adaptation, to mobilize $25 billion for climate adaptation.

The African Development Fund 16^th replenishment opened the Climate Action Window to mobilize climate financing for the low-income countries which are most vulnerable to climate change but are least able to access climate finance. With an initial contribution of $429 million, the Climate Action Window hopes to mobilize up to $13 billion eventually in support of climate adaptation for the ADF countries.

To mobilize more private sector climate financing for Africa, we launched the African Financial Alliance for Climate, to bring together all financial institutions and stock exchanges in Africa, to green the financial ecosystem.

To green the infrastructure space of Africa, they launched the Alliance for Green Infrastructure (AGIA) was launched by the African Development Bank, Africa50, French Development Agency, European Investment Bank, European Bank for Reconstruction and Development and the Rockefeller Foundation.

AGIA will accelerate private sector investments in renewable energy, green urban transport systems, green hydrogen, and climate-resilient infrastructure.

AGIA plans to mobilize $500 million of project preparation and project development financing using private equity platforms and mobilize $10 billion for private sector financing for green infrastructure in Africa.

Dear Governors,

The Bank is doing a lot to tackle challenges of energy, climate change and food security. In all these areas, you will notice that the Bank does not work alone. We work in partnerships and alliances that allow us to work at scale.

Tackling these issues at scale requires that the global financial architecture be better optimized. As I mentioned yesterday, the rechanneling of SDRs to the African Development Bank will allow us to leverage those SDRs by 3-4 times, and deliver greater impacts on energy, climate change and food security in Africa.

The success of the African Development Bank in developing the financial structure on receiving SDRs that has now met with approval of the IMF Staff is a major development. We now need at least five countries that can rechannel SDRs to the African Development Bank.

To further scale up financing for energy, climate, and food security, we will continue to deploy innovative instruments and free up more resources and attract private sector financing, including through greater use of guarantees, balance sheet optimization, synthetic securitization, as well as hybrid capital.

With your approval, the African Development Fund Market Borrowing Option will allow us to scale up available resources for ADF countries for transformative projects on energy, climate, and food security.

Dear Governors,

There is still much to do.

You can count on the African Development Bank to continue to push hard to deliver greater impacts for Africa and accelerate the continent's development.

As we do, your inputs, experiences and guidance, as governors, will be very helpful.

I now look forward to our discussions.

Thank you very much.

Statement by Dr. Akinwumi A. Adesina President, African Development Bank Group Governors' Dialogue Annual Meetings 2023 Sharm El Sheikh, Egypt 24 May 2023