African Development Bank Room2Run

Area characterisation:

Terrestrial

Objective:

Unlock climate finance via credit guarantee

Start/end date:

1 January 2018 - 31 December 2027

Financing:

Public-Private-Partnership

Potential impacts/benefits:

$2B additional climate finance unlocked for Africa
100km stormwater drainage infrastructure in Benin
17 hectares reforested
Climate-resilient agriculture for 250,000 cereal farmers in Tunisia

Actions:

A US$2bn UK government and City of London insurer guarantee optimises the AfDB balance sheet, unlocking up to US$2bn of climate finance, including drainage and reforestation in Benin and climate-resilient agriculture in Tunisia.

Organisations:

African Development Bank, UK Foreign Commonwealth and Development Office (FCDO), AXA XL, Axis Specialty, HDI Global Specialty, Texel Group, European Commission (European Fund for Sustainable Development), Mariner Investment Group, Africa50, Mizuho International

Contacts:

Case study referred by NATURANCE. For more information, please contact: info@naturance.eu.

The Room to Run Sovereign program is a balance sheet optimization transaction launched at COP26, through which a US$ 2 billion guarantee provided by the UK Government (US$ 1.6 billion) and City of London insurers (US$ 400 million) enables the African Development Bank to provide up to an additional US$ 2 billion of climate finance to Africa by 2027, split between adaptation and mitigation. By assuming credit exposure on the Bank's sovereign portfolio, the insurance guarantee unlocks lending capacity for nature-positive investments. In Benin, US$ 129 million funded climate adaptation activities including 100km of stormwater drainage infrastructure and reforestation of 17 hectares. In Tunisia, up to US$ 87 million supports climate-resilient agriculture for 250,000 cereal farmers facing water stress.