African countries to Issue more than $1 billion in climate change bonds
The bonds – planned to be issued in 2016 – will provide additional financing to participating countries to enhance their climate adaptation investments, in the event that weather shocks such as extreme heat, droughts, floods or cyclones increase in occurrence and intensity across the continent.
“Africa needs solutions. The XCF will offer African nations a new financing mechanism to manage climate risks by providing direct access to new private capital and by leveraging development partner contributions.
Following the announcement, ARC will work with African States and their partners towards having an effective and fair XCF design in place when nations convene in Paris next year for the UN Climate Change Conference.
“Climate change knows no borders. We need operational solutions that will channel climate change funds and increase direct access to climate finance. It is vital to minimize the risk to the most vulnerable.
Designed to access private capital and diversify the available funding sources, the XCF will be structured as a catastrophe bond program, whereby its financial obligations to countries over a three- to five-year financing window will be securitized, issued as cat bonds and financed by capital provided from private investors.
“As pioneers in promoting innovative finance solutions for climate change, The Rockefeller Foundation is proud to have been an early supporter of the African Risk Capacity. With a smart deployment of the power of the capital markets, the XCF will be an important addition to efforts to build climate resilience across Africa,” said Dr. Judith Rodin, President of The Rockefeller Foundation.
Source: cpifinancial- African countries to Issue more than $1 billion in climate change bonds
