AfDB’s Adaptation Benefits Mechanism Wins Grand Prix for Pioneering Urban Climate Resilience Finance

“The climate challenges are already visible here in Cairo,” Phillips explained, underscoring the city’s vulnerability to flash flooding, a newly emerging climate phenomenon.

The African Development Bank (AfDB) was awarded the Special Jury Grand Prix at the inaugural Finance Your Cities (FYC) Innovation Awards for its innovative Adaptation Benefits Mechanism (ABM), recognized as a game-changer in urban climate adaptation finance. This award, backed by the French Ministry of Ecological Transition, the French Agency for Ecological Transition, United Cities and Local Governments, and the European Commission, was presented to AfDB's Country Manager for Egypt, Abdourahmane Diaw, and Climate and Environment Finance Manager, Gareth Phillips, during the 12th World Urban Forum on November 5, 2024, in Cairo, Egypt.

The ABM, developed by the AfDB, serves as a pioneering financial tool to mobilize both public and private sector funding, with the specific aim of bolstering climate resilience among vulnerable communities and ecosystems in urban settings. By certifying and monetizing the multifaceted benefits of adaptation projects, the ABM makes otherwise infeasible projects viable, channeling investments towards transformative local solutions.

“The climate challenges are already visible here in Cairo,” Phillips explained, underscoring the city’s vulnerability to flash flooding, a newly emerging climate phenomenon. “To address such risks, especially in densely populated areas like Cairo’s old city, we need a range of measures that the private sector could help support through the ABM. This Mechanism is ideal for funding private-sector initiatives aimed at climate resilience, including disaster risk reduction technologies," he noted. The ABM allows local governments to engage private firms in resilience initiatives, such as flood management and waste recycling, that align with locally led adaptation priorities.

The award jury praised the ABM’s unique approach to breaking down barriers in climate finance, noting its strong potential for scaling up sustainable, climate-resilient urban development across Africa. With over 70% of African cities facing high risks from climate change and a projected temperature increase on the continent of 2-4 times the global average, the ABM’s role is timely and critical.

AfDB is already executing demonstration projects through the ABM, including an upcoming water-sector project in Egypt (2025) aimed at mitigating drought impacts, and a women-led plastic recycling facility in Kaolack, Senegal. “The Kaolack recycling facility is especially exciting as it is both women-led and positioned to reduce flood risks exacerbated by climate change,” said Khalifa Ababacar Sarr, Director General of the Senegal Waste Management Authority, who emphasized that the project would help manage urban flooding while promoting circular economy practices in the city.

Since its 2019 pilot, the ABM has demonstrated significant potential in driving local climate resilience initiatives. AfDB has aligned the ABM with its other financial tools, such as the Climate Investment Funds, Africa Climate Change Fund, Africa Adaptation Acceleration Programme, and the Africa NDC Hub. These instruments collectively support projects that aim to strengthen adaptation strategies and reduce disaster risks across the continent.

The recognition at the FYC Awards signals growing international support for AfDB's efforts in climate adaptation financing and a commitment to building sustainable and climate-resilient urban infrastructures across Africa.