Boitumelo Mosako, CEO of DBSA

 

In the arid landscapes of southern Africa, water scarcity and climate change cast a looming shadow over the region’s sustainability. As we stand at the crossroads of environmental challenges, the Development Bank of Southern Africa (DBSA) charts a visionary course to establish water as an asset class. This strategic move is not just about closing the financial gap but transforming the water sector, attracting private sector capital, and fortifying resilience.

 

Establishing water as an asset class – a strategic imperative

 

The challenges posed by water scarcity and climate change require innovative solutions that transcend traditional funding mechanisms. Part of the answer lies in establishing water as an asset class, a transformative endeavour that beckons private sector capital and ensures sector resilience. At the DBSA, we recognise the imperative of this approach and draw inspiration from successful initiatives like the Climate Finance Facility (CFF), Embedded Generation Investment Programme (EGIP), and the Water Reuse Programme.

 

A programmatic approach – lessons from success

 

Our journey to transform water into an investable asset class is anchored in a programmatic approach, a proven path to success demonstrated by our experiences with CFF, EGIP, and Water Reuse Programme. Key insights include the importance of a structured framework, comprehensive risk mitigation, incentivising investment through tailored incentives, and the power of data-driven decision-making. These principles provide a clear roadmap as we embark on this transformative journey.

 

Water as an asset class – paving the way forward

 

By establishing water as an asset class, we lay the foundation for a sustainable and resilient water sector. Private sector investment is not just a means to bridge the financial gap; it brings expertise, innovation, and efficiency to the forefront. Our commitment at the DBSA is unwavering. Collaborating with private sector partners, government institutions, and communities, we aspire to secure a brighter and more sustainable future for all.

 

Nature finance – a symbiotic relationship with climate resilience

 

In the dynamic landscape of climate change finance, the integration of nature and climate emerges as a beacon of innovation. Nature finance, often an unsung hero, extends beyond carbon sequestration to encompass sustainable management and restoration of ecosystems. At the DBSA, we recognise the symbiotic relationship between nature and climate, embarking on a transformative journey to seamlessly integrate nature finance into our climate finance portfolio.

  

The imperative of climate resilience – a holistic approach

 

Climate resilience takes centre stage in municipal planning, creating strong, adaptive communities capable of withstanding climate-induced shocks. Nature finance becomes climate finance as it goes beyond carbon sequestration, contributing to water resilience, biodiversity conservation, and community empowerment. Our vision at the DBSA involves a paradigm shift in how we perceive and deploy financial resources, encompassing holistic project assessment, innovative financing mechanisms, strategic partnerships, and capacity building.

 

Challenges and the road ahead – a call for collaboration

 

While the integration of nature finance is promising, challenges persist. Standardised metrics, robust monitoring frameworks, and understanding the social dimensions of nature-based solutions are paramount. The road ahead necessitates collaboration, innovation, and a steadfast commitment to integrating nature into our climate resilience narrative. As the DBSA leads this transformative journey, we invite global partners to join us in this pioneering endeavour, where the flourishing of nature becomes synonymous with climate resilience.

 

Enhancing access to climate and nature finance for African cities – a municipal call to action

 

Urban areas find themselves at the frontline of climate challenges, where the impacts are immediate and pressing. Municipalities, the cornerstones of climate resilience, play a crucial role in crafting resilient urban environments. However, the challenge lies in securing significant funding for resilience-building projects. The DBSA, fully committed to this cause, recognises that climate resilience is not just about reacting to crises but proactively preparing for them.

 

Conclusion – a resilient and sustainable future beckons

 

In conclusion, as we stand at the crossroads of water scarcity and climate change, the DBSA’s vision emerges as a beacon of hope. By establishing water as an asset class and integrating nature finance into climate strategies, the DBSA is not only addressing the challenges of today but also building a legacy for generations to come. The commitment to resilience, innovation, and sustainability, in collaboration with private sector partners, government institutions, and communities, ensures a brighter and more sustainable future for southern Africa.

 

This collective journey toward a resilient and sustainable future invites stakeholder, partners, and the global community to join hands with the DBSA. By pioneering innovative, collaborative solutions, we lay the foundation for a climate-resilient, prosperous Southern Africa where the flourishing of nature becomes synonymous with climate resilience.

 

ENDS

 

ABOUT COP28

COP28 signifies the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC), scheduled to take place in the UAE in 2023. This conference is a pivotal gathering, uniting nations at a crucial juncture for significant global efforts towards climate action. With an ambitious agenda, COP28 is designed to be inclusive, transparent, pragmatic, and focused on delivering tangible results.

 

Please take us through why COP28 is so important for the DBSA and why the Bank will be taking part?

Climate change and global warming affect all countries across the globe. Several African countries, including South Africa, have been reporting drought disasters and rainfall fluctuations, which have significantly impacted the economy, infrastructure project development and the lives of many citizens. While the effects of climate change have been felt for many years, with research and investments funnelled into the development support to relevant solutions, the problems persist.

As the Development Bank of Southern Africa, we aim to mainstream climate finance into our development strategy through infrastructure deployment towards a green growth economy. Our role as the Bank is to take an integrated approach to infrastructure delivery from planning, preparation to finance and implementation.

DBSA has extensive experience in dealing with climate change through sourcing funds to implement sustainable and environmentally friendly infrastructure solutions. We see our role as being one of supporting government’s commitment to contribute to a wide range of goals of transitioning to a greener economy. And we do this by supporting government and the region in meeting its Nationally Determined Contributions as well as in aiming to achieve excellence in climate change reporting and the development of appropriate frameworks.

 

What will the Bank be doing at COP28 this year?

 There is a quite number of activities that we will be doing at Dubai as the Bank. We will be part of various events and panels both in the green zone and the blue zone where our different spokespeople will be involved such as the Integrating resilience into municipal planning to facilitate climate finance, AfIDA, DFI and MBDs Finance Affordability, Unlocking Potential Green Hydrogen, Nature Finance is Climate Finance and Climate Change Resilience in the Water Sector – opportunities for Water Reuse as a new asset class to attract private sector capital panels. We will be hosting these on the South African Pavilion with NBI as well as on the IDFC Pavilion. Our CEO Ms Boitumelo Mosako will also be taking part in various high-level conversations within the blue zone with world leaders, other senior politicians, and heads of various DFIs.

Our CEO, Boitumelo Mosaka will also take part in an event co-hosted by the COP28 Presidency, UN-Habitat, and the UN Climate Change High-Level Champion for COP28, the second Ministerial Meeting on Urbanisation and Climate Change will be the high-level event of the COP28 Multilevel Action, Urbanisation and Built Environment Day on 6 December 2023. The Ministerial Meeting will convene Ministers of Housing, Urban Development, Environment Finance, and other portfolios; local and regional leaders; financial institutions; non-government organisations, and other stakeholders to articulate a suite of multilevel actions for sustainable urbanisation across sectors including buildings, waste, transport, water, energy, and nature.

 

What are some of the objectives you have as an organisation heading to COP28?

As the Development Bank of Southern Africa, our objectives coming out of COP28 would be:

• Climate Financing – Increase commitment to climate finance and sustainable development projects and explore innovative financing mechanisms to support climate-related initiatives.
• Sustainable Infrastructure Development – Support the development of sustainable and climate-resilient infrastructure projects and prioritise investments in projects that enhance adaptation and mitigation efforts.
• Collaboration and Partnerships – Develop partnerships with other DFIs, international organisations, and private sector entities to leverage resources and expertise and actively engage in collaborative efforts to address climate-related issues at regional and global levels.
• Climate Policy Advocacy – Advocate for supportive climate policies at the national and regional levels and engage with policymakers to align development strategies with climate goals and commitments.
• Monitoring and Reporting – Establish robust monitoring and reporting mechanisms to track the impact of climate-related projects and ensure transparency in reporting on climate finance disbursement and project outcomes.

 

How does the leadership team at DBSA bring expertise to the COP28 discussions on climate finance, resilience, and sustainable development in the region?

The DBSA leadership team brings a wealth of expertise to COP28 discussions on climate finance, resilience, and sustainable development in Southern Africa. Led by Ms. Boitumelo Mosako, our CEO, the team’s strategic vision aligns with COP28’s global goals, guiding impactful initiatives. Additionally, the Group Executives, including Olympus Manthata (Head of Climate Finance), Muhammed Sayed (Climate Change Specialist), and Siloshini Naidoo (Head of ESG), will play pivotal roles.

 

Can you elaborate on the leadership’s vision for leveraging DBSA’s expertise to advance climate action initiatives during COP28?

At DBSA, the leadership, under the guidance of Ms. Boitumelo Mosako, CEO of DBSA, envisions leveraging the bank’s extensive expertise to drive impactful climate action initiatives at COP28. The vision is centred on harnessing our collective knowledge and experience to play a pivotal role in shaping discussions and actions that address the pressing challenges of climate change. The leadership team is committed to fostering innovation, transparency, and collaboration, ensuring that DBSA’s contributions at COP28 are not only strategic but also result-oriented. By actively engaging in discussions on climate finance, resilience, and sustainable development, our vision is to showcase DBSA’s thought leadership, influence policy dialogues, and catalyse concrete actions that contribute to a more sustainable and resilient future for Southern Africa and beyond, as such, our Group Executives will engage in conversations narrated and not limited to the focus below:

• Olympus Manthata will be engaged in conversations that offer insights into DBSA’s climate finance strategies, emphasising innovation and sustainability.
• Muhammed Sayed will be on panels with conversations that address strategies for mitigating and adapting to climate change, showcasing DBSA’s commitment to green finance and renewable energy.
• Siloshini Naidoo will contribute towards panels that offer valuable perspectives on ESG integration, emphasising responsible financing and sustainable practices. Together, the DBSA team provides a comprehensive and refined approach to climate action and sustainability at COP28.

 

How does DBSA’s approach to sustainable development align with the themes and goals of COP28, particularly in the areas of urbanisation, green hydrogen, and nature finance?

DBSA’s approach to sustainable development is aligned with the themes and goals of COP28, specifically focusing on key areas such as urbanisation, green hydrogen, and nature finance.

In the realm of urbanisation, the DBSA emphasises resilient and inclusive municipal planning, aligning with COP28’s aim to integrate sustainability into urban development. Our commitment extends to exploring opportunities in the water sector, including water reuse as a new asset class, showcasing our dedication to nature finance as an integral part of climate finance. Additionally, DBSA actively contributes to unlocking the potential of green hydrogen, promoting sustainable energy solutions in harmony with COP28’s objectives.

In essence, our approach reflects a holistic commitment to addressing climate challenges, fostering sustainable urbanisation, advancing green technologies, and integrating nature-based solutions—all in accordance with the overarching goals of COP28.

 

How will the Bank showcase how to make nature projects financially viable and how does the DBSA attract private sector funding?

It is important that we address the disparity between biodiversity preservation and climate action, which is paramount. Both issues trace their roots back to the Rio Summit in 1992, with the Biodiversity Convention even preceding the Convention on Climate Change. However, their progress in terms of implementation and funding hasn’t been on equal footing. Exploring the reasons behind this gap is crucial, including factors like the absence of clear metrics, inadequate biodiversity finance allocations in development partnerships, and the necessity for a more compelling narrative to drive support.

It’s imperative to explore effective ways of merging biodiversity and climate finance to confront these interconnected challenges. While climate finance has seen a surge, biodiversity finance hasn’t received proportional attention. The key challenge lies in channelling this substantial climate finance toward initiatives that benefit nature while also achieving a net zero impact.

The goals of this discussion are diverse. We aim to underscore the mutual advantages of nature-centric finance, spotlighting the roles played by Development Banks and IDFC. We’ll showcase various financial instruments dedicated to nature, spanning both public and private sectors. Concrete examples of international collaboration will be shared, highlighting IDFC’s Position Paper on Biodiversity. This paper urges mobilising finance to support nature-positive projects, dedicating a significant portion of climate finance to biodiversity initiatives, and leveraging private investment in this domain.

 

What is the link between Project preparation and sustainability?

As the Development Bank of Southern Africa, we recognise the critical importance of integrating sustainability into every phase of project development, including project preparation. Sustainability is not only a fundamental aspect of our commitment to responsible development but also a key driver for ensuring the long-term success and positive impact of the projects we support.

At the Bank, we view project preparation as a strategic opportunity to embed sustainability into the DNA of every project, contributing to the overall resilience and positive impact on the communities we serve. We remain steadfast in our commitment to encouraging sustainable development in Southern Africa.

 

What is the role of project preparation when it comes to climate change?

Project preparation plays a crucial role in addressing climate change by incorporating climate considerations into the planning and implementation of projects. Key aspects include conducting risk assessments, integrating climate data, adopting resilient technologies and practices, engaging local communities, incorporating ecosystem-based approaches, designing climate-resilient infrastructure, building capacity, securing climate finance, and establishing robust monitoring and evaluation frameworks. The goal is to enhance project resilience, reduce vulnerabilities, and contribute to sustainable development in the face of a changing climate. By addressing climate challenges from the outset, project preparation ensures that initiatives are well-adapted, socially inclusive, and environmentally sustainable over the long term.

 

What are the insights into DBSA’s collaborations and partnerships with other organisations, governments, and stakeholders specifically for COP28 related initiatives?

At the DBSA, our commitment to impactful collaboration is exemplified through strategic partnerships with various organisations, governments, and stakeholders, specifically tailored for COP28-related initiatives. These collaborations are designed to amplify the effectiveness of our contributions to climate action and sustainable development during the conference. Working closely with international organisations, governmental bodies, and diverse stakeholders, the DBSA seeks to foster a collective and inclusive approach to address the challenges outlined in COP28. These partnerships aim to leverage expertise, resources, and knowledge, ensuring a holistic and multifaceted strategy that aligns with global goals. By actively engaging in these collaborative efforts, the DBSA underscores its dedication to forging meaningful connections that drive positive change in the Southern Africa region and contribute to the global climate agenda.

A prominent example is our collaboration with state-backed firms from the Netherlands in establishing the groundbreaking SA-H2 fund. This $1-billion green hydrogen initiative, announced during a notable event in Pretoria attended by leaders from the Netherlands, Denmark, and South Africa, represents a pivotal contribution to renewable energy investments. The DBSA, alongside the Industrial Development Corporation of South Africa, both state finance institutions, actively participates in the SA-H2 fund. Additionally, strategic collaboration with the Netherlands’ Climate Fund Managers, Invest International, and key stakeholders like Sanlam Ltd. underscores DBSA’s commitment to forging international alliances for impactful climate action.

 

How does DBSA plan to build on the outcomes of COP28 to address emerging challenges and opportunities in the region over the coming years?

The DBSA is strategically positioned to leverage the outcomes of COP28 as a springboard for addressing emerging challenges and capitalising on opportunities in the Southern Africa region over the coming years. Building on the momentum generated at COP28, our plan involves translating the knowledge, insights, and collaborations gained into actionable and sustainable initiatives. We are committed to aligning our strategies with the global climate agenda, integrating innovative solutions to tackle emerging challenges. This includes fortifying partnerships with governments, organisations, and stakeholders to implement climate-resilient projects. The DBSA will also focus on enhancing financial mechanisms and exploring new avenues for sustainable development, keeping pace with evolving environmental and economic landscapes. Through continuous adaptation and proactive engagement, we aim to contribute meaningfully to the region’s resilience, development, and prosperity in the face of emerging challenges and opportunities.

 

As the DBSA, how do you plan to decarbonise your own balance sheet?

 At the Development Bank of Southern Africa, our commitment to reducing carbon emissions extends beyond our financing endeavours. We recognise the importance of collective action in fostering a sustainable, low-carbon future. To this end, we actively engage with other development finance institutions across the country. Together, we align our visions and strategies to ensure a cohesive approach towards realising a green, net zero emission future.

As a DFI our robust network includes strong alliances both within the country and globally, particularly with International Development Finance Institutions. Through these partnerships, we leverage their support to attract concessional climate finance capital, which is then strategically allocated to high-impact projects on a programmatic level.

These collaborations play a vital role in our pursuit of financing projects that align with our sustainability goals. By working closely with international partners, we tap into additional funding sources specifically earmarked for climate-conscious initiatives. This allows us to amplify our financial support and make substantial investments in projects that demonstrate clear environmental benefits.

Through these collaborations, we strive for a unified understanding of what a sustainable investment portfolio looks like. It involves not only identifying but championing projects that significantly contribute to carbon reduction and align with our shared commitment to a net zero future.

 

For further information during COP28:

Please contact Charles Mabowane at cmabowane@webershandwick.com or Tankiso Motsoeneng at tmotsoeneng@webershandwick.com