By Issah Mohammed
Accra, June 28, GNA – Professor Joshua Yindenaba Abor, a Financial Economist, has recommended the mainstreaming of climate finance into the operations of Development Finance Institution (DFI).
The professor of Finance at the University of Ghana Business School observed that DFIs has the capacity to mobilise additional finance, develop relevant frameworks and implement green projects to ensure that sustainable climate policy was fully compatible with Sustainable Development Goals and other climate agreements.
“DFI can achieve the global good of climate action by mainstreaming climate change into their activities and operations, adaptation and financing mechanisms,” he said at an inaugural lecture of the Ghana Academy of Arts and Sciences (GAAS).
He was speaking on the topic, “Rethinking Development Finance for Inclusive Green Finance: Are there Financial Stability Implications?”.
He said DFI such as the Development Bank of Ghana were critical actors in mobilising resource towards addressing climate change and sustainable development.
“DFI leverage financial resources from capital markets owing to their strong credit ratings and this enables them to provide long-term capital to support development projects,” he said.
Prof Abor advised that financing provided by DFI especially multilateral development banks (MBD) must focus on areas such as smart/green agriculture, clean energy, and green infrastructure.
He also encouraged collaboration between MDB and National Development Banks (NDB) for contextual knowledge on safeguards, risk management framework and appropriate pricing model before lending to target entities.
He said DFIs must among other things engage shareholders for political will to support climate change fight and leverage private sector investments to support climate-related projects.
On the other hand, he said government had a critical role of increasing public investment in climate-related areas through domestic revenue from appropriate carbon taxes.
He also called for the revision of the architecture of channelling Special Drawing Rights (SDR) to allow surplus on SDR to serve as a source of international public funding for climate change.
Prof Abor also highlighted the need to explore voluntary and compliance carbon markets, promote intra regional trade to reduce carbon emissions and ensure efficient management of natural resources.
GNA