John Akuoko-Tawiah of Development Bank Ghana at SAM 2023: On Sustainable Finance
Bob Summers Tuesday, February 06, 2024 11:39 AM - Comment(s)
Just a few minutes into talking with John Akuoko-Tawiah, it’s clear that he loves to look at the big picture. He sees how ideas can translate into solutions on the ground in Ghana and how they can be replicated around the world. I caught up with John after he participated in a panel discussion titled, “What do we mean by sustainable inclusive finance? Definitions, taxonomies, labelling,” at SAM 2023 in October in Togo. John Akuoko-Tawiah is the Head of ESG, Sustainability and Climate Finance for Development Bank Ghana.
John Akuoko-Tawiah: DBG supports micro-, small and medium-sized enterprises with climate financing, primarily by lending to commercial banks and what are known in Ghana as Specialized Deposit-Taking Institutions. We work with these participating financial institutions to integrate environmental and social sustainability measures into their lending processes, in line with both international and local ESG standards. Our portfolio of PFIs includes Fidelity Bank Ghana, Access Bank Ghana, Cal Bank, Consolidated Bank Ghana, Ecobank, Zenith Bank Ghana, Sinapi Aba Savings and Loans, Advans Savings and Loans, and Opportunity International. Together we finance sectors including agribusiness and manufacturing as well as designated “high-value” services, which are ICT, transport, education, hospitality and health. Part of the value we provide is to structure funding on relatively long tenors, between 5 and 15 years.
Ghana’s NDCs comprise 47 adaptation and mitigation actions, including the creation of partnerships to develop new financial instruments for low-carbon, climate-resilient development. Part of this process is building a Green Taxonomy to specify business activities that are “green” and “non-green.” This will help guide our PFIs to set up green finance desks to facilitate deals that contribute to Ghana's NDCs as well as the UN’s SDGs. Another role of the facility is to support Ghana’s Energy Transition framework, through which the country aims to achieve net-zero carbon emissions by 2060.
Bob Summers: How does Development Bank Ghana approach wholesale lending to its partner financial institutions?
In addition to funding, DBG provides technical assistance. For example, we help our PFIs strengthen their ESG capacity and develop products tailored to the needs of underserved MSMEs.
Bob: What is the status of your new Green Finance and Investment Facility?
John: We’ve earmarked the equivalent of over USD 8 million for this facility to scale low-carbon and climate-resilient investments in Ghana over the next few years. The bank also is securing additional grant funding from development partners to expand this facility. So far, we’ve disbursed the equivalent of over USD 1.6 million to PFIs. This is part of Ghana’s commitment to meet its Nationally Determined Contributions under the Paris Agreement by 2030.
Ghana’s NDCs comprise 47 adaptation and mitigation actions, including the creation of partnerships to develop new financial instruments for low-carbon, climate-resilient development. Part of this process is building a Green Taxonomy to specify business activities that are “green” and “non-green.” This will help guide our PFIs to set up green finance desks to facilitate deals that contribute to Ghana's NDCs as well as the UN’s SDGs. Another role of the facility is to support Ghana’s Energy Transition framework, through which the country aims to achieve net-zero carbon emissions by 2060.
Bob: What is in the future for DBG?
John: DBG’s response to the impacts of climate change is part of a global challenge that requires urgent and coordinated efforts. Despite Africa's relatively low contribution to greenhouse gasses, the continent is among the most vulnerable to extreme weather events, particularly in sectors like agriculture, which form a significant part of the region’s GDP. To address these challenges, financial institutions face several hurdles. These include long payback periods for green investments, elevated interest rates on green loans, lack of technical expertise in evaluating green finance opportunities and a shortage of investment-ready projects for on-lending. DBG is looking to scale its Green Finance and Investment Facility to address these challenges by mobilising the equivalent of over USD 19 million in additional funding during 2024.
This feature closes a sponsored series supporting this past October’s African Microfinance Week (SAM 2023). SAM is organized by ADA and the Microfinance African Institutions Network with the support of the Directorate for Development Cooperation and Humanitarian Affairs of Luxembourg and the government of the event’s host country, which rotates each time the event takes place. The next SAM is scheduled for 2025. Bob Summers has been engaged to promote SAM since 2015.
