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The African Development Bank (AfDB) has launched the implementation phase of the Adaptation Benefits Mechanism (ABM), paving the way for the issuance of a new class of climate assets known as Certified Adaptation Benefits (CABs).

The announcement, marking the mechanism’s move from pilot to a permanent Secretariat by 2027, was made at a COP30 event titled “ABM Comes of Age: Transformational Climate Finance in Action.”

The ABM is significant as the first non-market approach specifically recognized for adaptation by the UNFCCC under the Paris Agreement. This milestone was highlighted during an event moderated by Luc Gnacadja, Co-Chair of the ABM Executive Committee.

The event featured a keynote address by Tariye Gbadegesin, CEO of the Climate Investment Funds, and a panel discussion with representatives from Kenya, the Sahara and Sahel Observatory, the UK, and the Bank Group.

Developed and hosted by the Bank since 2019, the ABM will shortly begin issuing CABs. This new asset class is designed to finance adaptation projects directly.

According to Dr. Kevin Kariuki, the Bank’s Vice President for Power, Energy, Climate Change, and Green Growth, the mechanism’s transformative potential is evident and one to be relied upon.

“The ABM represents a mechanism that governments can use to require emitters to contribute towards the cost of adaptation,” Dr. Kariuki said.

He added that “It’s 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.”

At the event, the Bank Group launched a call for expressions of interest from governments and international organizations interested in hosting the ABM.

When fully operational, it is expected to advance global objectives, and the African Development Bank could provide lending to developers of adaptation projects in Africa.

Gareth Phillips, Bank Group Manager for Climate and Environment Finance, underlined the ABM’s integral role in helping the continent overcome unceasing climate shocks. He pointed out that the Adaptation Benefits Mechanism shows how 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,” added Phillips.

As ODA budgets face increasing constraints, the ABM offers a promising alternative to traditional finance, aligning transparency, efficiency, and solidarity in climate action while pioneering private sector mobilization of adaptation finance.