New push for green infrastructure projects in Africa
BUSINESS REPORTER
Four African institutions will combine forces with global partners to create a fund which is projected to generate up to $10bn in investment opportunities as the continent transitions to Net Zero emissions with investments in greener, climate-resilient and sustainable infrastructure.
The Alliance for Green Infrastructure in Africa—a brainchild of the African Development Bank (AfDB), Africa50, the African Union Commission and the African Union Development Agency and global partners –will raise up to US$500m of early-stage project development and project preparation capital.
It will also catalyse bankable, greener infrastructure projects at scale and speed.
AfDB president Akinwumi Adesina told delegates at a thematic roundtable on climate change and energy transition at the 6th European Union-African Union Summit in Brussels, Belgium on Thursday on the plan for the green infrastructure alliance.
The European Investment Bank, European Bank for Reconstruction and Development, the French Development Agency, and the Rockefeller Foundation have expressed interest in joining the Alliance and there is a strong push to attract more African and global partners.
Climate change continues to devastate Africa’s economies and the livelihoods of its people, despite the continent’s minimal contribution to greenhouse gas emissions.
The key challenge for infrastructure development on the African continent is the dearth of bankable opportunities.
Evidence shows that there is enough capital looking for yield but an absence of a robust pipeline of de-risked projects with stable long-term cash flows.
There is also increasing institutional investor appetite for green, sustainable, environmental and social investments.
This has pushed African institutions and global partners to mitigate the adverse effects of climate change through prompt investment in greener, climate-resilient, inclusive, quality and sustainable infrastructure.
The Alliance for Green Infrastructure in Africa will complement, enhance and partner with continental and global initiatives to crowd in private capital to fund green infrastructure projects. The idea is to bridge investment gaps and engender financing at scale and with speed.
The Alliance’s overarching goal will be to leverage the private sector to transparently develop transformative infrastructure that sustainably bridges Africa’s infrastructure deficit in a climate-resilient manner.
It will do this by addressing universal energy access and strengthening Africa’s energy systems, while minimising sovereign debt accumulation, especially during this period of limited fiscal capacity across Africa.
To achieve scale in greener infrastructure project development, the Alliance will execute its programme with three categories of infrastructure project developers: a scaled-up Africa50; Africa50 in co-development with local African developers; and select experienced third-party private infrastructure developers.
It is estimated that Africa’s infrastructure investment gap is more than US$100bn a year.
