On November 15, 2024, during COP29 in Baku, Azerbaijan, the Government of Benin announced a new set of initiatives to enhance climate action. Supported by international financial institutions and development partners, these initiatives aim to unlock climate finance through mechanisms such as carbon monetization and enhanced credit instruments. The framework is designed to mobilize resources from both public and private sectors for Benin's climate adaptation and mitigation priorities.
Romuald Wadagni, Senior Minister and Minister of Economy and Finances of Benin, stated: "With strong support from our partners at the July IMF and World Bank Group Climate Financing Round Table in Cotonou, Benin is transforming climate goals into action...Leveraging our experience in international capital markets, such as our 2021 SDG bond framework, we aim to catalyze private investment to drive climate action."
Benin has secured significant funding for its climate policies. This includes $1.4 billion from the World Bank Group’s International Development Association (IDA) and an additional $200 million from the Resilience and Sustainability Facility (RSF) approved by the IMF in December 2023. These commitments are further supported by a EUR 195 million partial credit guarantee from the African Development Bank (AfDB).
A joint Climate Finance Roundtable was co-convened by the IMF and World Bank Group in July 2024. During this event in Cotonou, the Government of Benin received full commitment from its development partners to establish a country platform for climate finance. The estimated financing gap for achieving Benin’s Nationally Determined Contributions (NDCs) is about USD10 billion by 2030.
The carbon monetization strategy involves managing carbon credits through energy and regenerative agriculture projects. The Global Green Growth Institute supports this effort via its Carbon Transaction Facility (CTF). Proceeds will be managed by Benin's Debt Management Office to align with updated NDCs.
Enhanced budget support will be coordinated through a common policy matrix developed with contributions from various partners including the World Bank Group, African Development Bank, AIIB, OPEC Fund, among others.
Benin also seeks to attract private investment through innovative financing mechanisms. Collaborations with entities like the European Union aim to strengthen green bond markets while initiatives under AfDB’s African Green Banks Initiative support blended financing vehicles for private sector investments.
Additionally, a one-stop window for local financial access is being established with support from organizations such as IFC and GGGI. This platform aims to facilitate long-term investments by small and medium enterprises in line with green objectives.