Benin Launches Climate Action Framework at COP29 to Accelerate Green Transition and Secure SDGs

Benin has built a solid foundation for climate action through significant financial commitments from international development partners.

On November 15, the Government of Benin, in collaboration with international financial institutions and development partners, launched an ambitious climate action framework aimed at advancing the country’s green transition and supporting its sustainable development goals (SDGs). This announcement was made at the 29th UN Climate Conference (COP29) in Baku, Azerbaijan, and marks a significant step in Benin’s commitment to addressing climate change and unlocking financial resources for sustainable development.

The climate action framework includes several innovative initiatives designed to accelerate climate adaptation and mitigation efforts, with a focus on carbon monetization, credit instruments, policy alignment, and advanced financing strategies. These initiatives will help Benin mobilize both public and private sector resources while safeguarding the country’s debt sustainability.

Romuald Wadagni, Senior Minister at the Ministry of Economy and Finance of Benin emphasized the country’s drive to translate climate goals into actionable results, stating: “With strong support from our partners, Benin is translating climate goals into concrete action…Leveraging our experience in international capital markets, like our 2021 SDG bond framework, we aim to unlock private investment to drive climate action. By harnessing innovative financing, we are transforming our ambitions into concrete results that will advance adaptation and mitigation efforts.”

He added that the country’s commitment extends beyond national borders, contributing to a sustainable and resilient future for the global community.

Benin’s Proven Track Record in Climate Finance

Benin has built a solid foundation for climate action through significant financial commitments from international development partners. The World Bank Group has supported the country with $1.4 billion through the International Development Association (IDA), and $200 million from the IMF’s Resilience and Sustainability Facility (RSF). Additionally, the African Development Bank (AfDB) has provided a €195 million partial credit guarantee, enabling the country to access financing for its green transition.

These financial commitments, along with ongoing initiatives, demonstrate Benin’s strong leadership in addressing climate change while advancing debt sustainability and fostering economic resilience.

Collaboration at the Climate Finance Roundtable

In July 2024, at the Climate Finance Roundtable, jointly convened by the IMF and the World Bank Group, the Government of Benin and its international partners reaffirmed their commitment to enhancing the country’s climate action efforts. They emphasized the need to establish a climate finance country platform to unlock additional financial resources and technical support to achieve the country’s Nationally Determined Contributions (NDCs).

With an estimated financing gap of $10 billion by 2030 to meet its NDC targets, Benin and its development partners are working collaboratively to identify financing options and provide technical assistance to boost the country’s climate action capacity.

Carbon Monetization Mechanism & Enhanced Credit Instruments

Benin is implementing a carbon monetization strategy supported by 2.5 million carbon credits derived from energy and regenerative agriculture projects. These efforts, managed by the National Carbon Registration Authority, will help fund adaptation and mitigation initiatives in line with Benin’s NDCs. The initiative is supported by the Global Green Growth Institute and Luxembourg.

Enhanced Budget Support via a Common Policy Matrix

In collaboration with the World Bank, African Development Bank (AfDB), Asian Infrastructure Investment Bank (AIIB), and the OPEC Fund, Benin has established a three-year framework to coordinate budget support for scaling climate financing. The creation of a common policy matrix, developed with the IMF’s input, will streamline policy reforms, enhance aid effectiveness, and accelerate climate action.

Attracting Private Investment Through Innovative Financing

Benin has secured a €200 million guarantee through the World Bank Group’s Guarantee Platform, which will mobilize €500 million in long-term financing for climate resilience projects. Additionally, European Union support will help strengthen Benin’s green bond market, attracting institutional investment for green initiatives.

Establishing a One-Stop Window for Local Financial Access

A finance platform is being set up in collaboration with the World Bank, International Finance Corporation (IFC), Global Green Growth Institute, and the West African Development Bank. This platform will facilitate lending to local banks and microfinance institutions, enabling long-term investments by small and medium-sized enterprises (SMEs) and promoting green business growth in line with sustainable development objectives.

Commitment to a Green Future

Through these comprehensive initiatives, Benin is positioning itself as a leader in climate action in West Africa and beyond. The innovative financing mechanisms, combined with strong international partnerships, will help the country make significant strides towards its low-carbon, climate-resilient future. As Romuald Wadagni stated, Benin’s climate efforts will not only benefit the nation but will also contribute to a sustainable global future.

The ambitious framework launched at COP29 is a testament to the nation’s dedication to sustainable development, climate resilience, and economic growth, with a focus on adaptation, mitigation, and the promotion of green investments to ensure a better future for all.