AfDB Launches Next Phase of Adaptation Benefits Mechanism to Boost Climate Finance

As climate impacts accelerate—manifesting in more severe droughts, floods, heatwaves and ecosystem stress—the financing gap for adaptation widens.

The African Development Bank Group (AfDB) has officially concluded the pilot phase of the groundbreaking Adaptation Benefits Mechanism (ABM) and initiated a transition phase that will culminate in the creation of a fully operational and permanent ABM Secretariat by 2027. This marks a major milestone in global climate governance, as the ABM is the first adaptation-focused, non-market approach formally recognised under the UNFCCC’s Paris Agreement.

The announcement was made during a high-level event at COP30 titled “ABM Comes of Age: Transformational Climate Finance in Action”, held at the Multilateral Development Bank Pavilion on 13 November. The event underscored growing global momentum behind innovative adaptation financing and the AfDB’s leadership in advancing climate resilience across Africa.

A New Era for Adaptation Finance

Since its inception in 2019, the ABM has been hosted and developed by the African Development Bank with the aim of creating a verified, transparent and dependable model for financing climate adaptation. Over the next stage of its evolution, the ABM will begin issuing Certified Adaptation Benefits (CABs) — a new class of climate asset designed to quantify and certify the outcomes of adaptation projects.

CABs will serve as performance-based adaptation credits, allowing governments, companies, development partners and even private citizens to fund adaptation activities with full confidence that their investments directly contribute to reducing vulnerability and protecting communities from climate impacts. Because the ABM is recognised as a non-market instrument, every dollar invested in CABs goes directly toward implementing or scaling adaptation measures, avoiding financial abstraction and ensuring tangible results on the ground.

Transition Toward a Permanent Secretariat

As part of the COP30 announcement, the AfDB issued a global call for expressions of interest from governments and international organisations interested in hosting the forthcoming ABM Secretariat. The permanent host institution will play a crucial role in guiding the mechanism, overseeing CAB certification, setting standards, and coordinating with adaptation project developers worldwide.

Once fully operational, the ABM is expected to not only support global climate goals but also unlock new financing pathways for adaptation projects in Africa. The AfDB signalled that it may provide lending to project developers seeking to utilise the ABM as a tool to scale effective resilience initiatives.

Leaders Highlight Transformative Impact

Dr. Kevin Kariuki, AfDB Vice President for Power, Energy, Climate Change and Green Growth, praised the ABM as a structural breakthrough in global adaptation finance. He highlighted that the mechanism creates a direct channel through which governments can require major emitters to contribute to adaptation costs.

“The ABM represents a mechanism that governments can use to demand emitters to contribute towards the cost of adaptation,” Dr. Kariuki said. “Its non-market status means that every dollar spent purchasing a CAB goes directly towards overcoming the financial barriers that adaptation projects face. This is a significant improvement in the use of scarce climate finance.”

Gareth Phillips, the Bank Group’s Manager for Climate and Environment Finance and one of the ABM’s chief architects, emphasised the mechanism’s ability to redefine how adaptation is supported globally:

“The Adaptation Benefits Mechanism shows that adaptation can be financed efficiently and transparently, outside traditional markets. By certifying the results of adaptation projects, the ABM provides a credible way for governments, companies and citizens to demonstrate solidarity with vulnerable communities while creating a new class of adaptation assets that can attract sustained investment.”

Global Engagement and High-Level Dialogue

The COP30 event brought together senior policymakers, climate finance experts and institutional partners. Moderated by Luc Gnacadja, Co-Chair of the ABM Executive Committee, the session featured a keynote speech from Tariye Gbadegesin, CEO of the Climate Investment Funds, and an insightful panel discussion with representatives from:

• Kenya,

• The Sahara and Sahel Observatory,

• The United Kingdom, and

• The African Development Bank Group.

Speakers underscored the urgent need to diversify adaptation financing, noting that traditional official development assistance (ODA) budgets are increasingly constrained, leaving vulnerable nations with fewer resources to address intensifying climate risks.

A Promising Alternative Amid Funding Challenges

As climate impacts accelerate—manifesting in more severe droughts, floods, heatwaves and ecosystem stress—the financing gap for adaptation widens. The ABM, stakeholders agreed, offers a credible and scalable alternative that brings together transparency, efficiency, and solidarity.

By mobilising new private-sector participation and offering a measurable, certifiable benefits framework, the ABM could redefine global adaptation funding just as carbon markets once transformed mitigation finance. Its focus on verified outcomes provides confidence to funders while delivering real benefits to frontline communities.

Looking Ahead

With the transition phase underway, the coming years will be pivotal. Establishing the permanent ABM Secretariat by 2027 will lay the institutional foundation for global adoption and help governments and financiers integrate Certified Adaptation Benefits into their climate strategies.

The African Development Bank’s leadership positions Africa—not historically responsible for the climate crisis but among the most vulnerable to its impacts—at the forefront of shaping equitable, innovative climate finance tools.