The Government of the United Kingdom has launched the first two projects under the Room2Run guarantee programme – a US$2bn guarantee provided to the African Development Bank (AfDB)
The Room2Run Guarantee was first announced at COP-26 and is a guarantee provided to AfDB by the UK with US$1.6bn in cover, and with City of London insurers covering US$400mn. By partially protecting the bank against the risk of default on some of its loans, the guarantee enables AfDB to provide an additional US$2bn of climate finance to Africa by 2027, with a 50-50 split between adaptation and mitigation.
At a joint press briefing in Sharm El Sheikh, Egypt, Andrew Mitchell, UK Minister of State for Development and Africa, announced that the initiative is now baring fruit with two projects unveiled. The EU€80mn (approx. US$86mn) Egyptian wastewater project and EU€37mn (approx. US$40mn) water sanitation project in Senegal, will focus on water supply and sanitation and will offer benefits to millions in their respective African countries.
Mitchell was joined by Rania Al-Mashat, Egyptian Minister of International Cooperation; AfDB senior vice president Bajabulile Swazi Tshabalala; and Senegal’s Minister of Economy, Planning and Cooperation, Oulimata Sarr.
In Egypt, the Water Recycling for Agriculture - Gabel El Asfar Wastewater Treatment Project, is the largest in Africa wastewater treatment plant in terms of capacity and the second largest in the world. The project here aims to increase arable lands by 70,000 acres addressing the food security issues. It will also increase access to safely managed sanitation services; increase wastewater treatment plant compliance standards, and create jobs, benefitting 5mn people.
“Creating headroom for multilateral development banks (MDBs) to extend financing to emerging economies for climate action is a key objective of MDB reforms. We commend the UK Government for their initiative: the Room2Run Sovereign Guarantee, supporting the African Development Bank Group with US$2bn to help the continent accelerate climate action and meet the Nationally Determined Contributions,” Al Mashat said.
In Senegal, the Access to Safe Water and Sanitation Services to build Sustainable Resilience in Disadvantaged Areas will reach 1.45mn people, out of which 51% are women who will benefit from improved access to drinking water and sanitation.
“The commitment to provide climate finance is real and the amount [US$2bn] is showing scale,” Sarr remarked. She said Senegal would welcome any funding that would enable them to scale up and fast track climate finance.