Africa Climate Innovation Compact and African Climate Facility established under PM Abiy’s initiative at ACS2 closing

Addis Ababa, September 11, 2025 (FMC) – The Africa Climate Innovation Compact (ACIC) and the African Climate Facility (ACF) have been established under the initiative of Prime Minister Abiy Ahmed of Ethiopia at the conclusion of the Second Africa Climate Summit (ACS2) held in Addis Ababa.

Prime Minister Abiy proposed the ACIC and ACF during his opening speech at the summit, highlighting Africa’s potential to drive climate solutions rather than being merely a victim of climate change.

At the close of ACS2, African leaders officially adopted the Addis Ababa Declaration on Climate Change and Call to Action, marking a historic milestone that positions Africa at the forefront of global climate action.

The Declaration called for strengthened support for African-led initiatives such as the African Union Great Green Wall Initiative, the African Forest Landscape Restoration Initiative, and Ethiopia’s Green Legacy Initiative, according to the joint press release.

The press release also revealed that the ACIC and ACF are expected to mobilize 50 billion USD annually to accelerate innovation and scale African-led climate solutions across energy, agriculture, water, transport, and resilience sectors, with a goal of 1,000 solutions by 2030.

Summit participants emphasized that adaptation finance is a legal obligation of developed countries, not charity, and must be delivered as grants rather than loans that could worsen Africa’s debt burden.

The press release further highlighted that a landmark agreement was reached to operationalize the African Climate Change Fund, supported by the African Development Bank, using green bonds and other innovative financing instruments tailored to Africa’s realities.

Heads of State and Government also spoke with one voice, calling for urgent reform of multilateral development banks to lower borrowing costs and expand African representation in global financial governance.

The press release noted several key commitments announced during the summit, including:

* The Government of Denmark pledging 79 million USD to support agricultural transformation.
* African financial institutions, including AfDB, Afreximbank, Africa50, and AFC, signing a Cooperation Framework to operationalize the Africa Green Industrialisation Initiative (AGII), backed by 100 billion USD to drive green growth and climate-smart industrialization.
* The Government of Italy reaffirming its pledge of 4.2 billion USD to the Italian Climate Fund, allocating 70% to Africa, with a memorandum of understanding signed with Ethiopia.
* The second phase of the Africa Adaptation Acceleration Program (AAAP 2.0), aiming to climate-proof food systems, infrastructure, and urban zones with 50 billion USD in investment by 2030.
* EIB Global signing technical assistance agreements with Zemen Bank, Dashen Bank, and Hibret Bank in Ethiopia, facilitated through the NDC Partnership, contributing to 100 billion EUR in investment by 2027.
* Advancement of the Mission 300 Agenda and Clean Cooking Initiative, aiming to provide modern energy access to 300 million Africans and clean cooking solutions to 900 million within the decade.

The press release also revealed that summit participants urged Africa’s share of global renewable energy investment to rise from 2% to at least 20% by 2030, and endorsed the Green Minerals Strategy, ensuring cobalt, lithium, copper, and rare earths contribute to both global clean energy supply chains and local industrial development.