BY BAMIDELE FAMOOFO
The African Development Bank Group and Africa50, in partnership with the African Union Commission and the African Union Development Agency (AUDA-NEPAD), are exploring collaboration with global partners to create an Alliance for Green Infrastructure in Africa.
The Alliance will catalyze bankable, greener infrastructure projects at scale and speed, raise up to $500 million of early-stage project development and project preparation capital which aims to generate up to $10 billion in investment opportunities and support the continentβs transition to Net Zero emissions with investments in greener, climate-resilient and sustainable infrastructure.
African Development Bank Group President, Akinwumi Adesina, made the announcement recently, while speaking at a thematic roundtable on climate change and energy transition at the 6th European Union-African Union Summit in Brussels, Belgium.
βThe European Investment Bank, European Bank for Reconstruction and Development, the French Development Agency, AFD, and the Rockefeller Foundation have expressed their interest in joining the Alliance. And there is a strong push to attract more African and global partners,β he said.
It is globally acknowledged that climate change continues to devastate Africaβs economies and the livelihoods of its people, despite the continentβs minimal contribution to greenhouse gas emissions. Climate change has taken lives, caused food insecurity, displaced populations, damaged critical infrastructure, and disrupted economies. Increased geopolitical tensions could further threaten livelihoods and stability.
The key challenge for infrastructure development on the African continent is the dearth of bankable opportunities. Therefore, project development and preparation are critically important. Evidence shows that there is enough capital looking for yield. However, what is missing is 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. That is why these African institutions and global partners are intent on mitigating 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 Allianceβs overarching goal will be to leverage the private sector to transparently develop transformative infrastructure that sustainably bridges Africaβs infrastructure deficit in a climate-resilient manner. It will do this by addressing universal energy access and strengthening Africaβs energy systems, while minimizing 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.
The Allianceβs project development activities are projected to generate up to $10 billion in investment opportunities. This will be mobilized from a combination of co-investments, co-financing, risk mitigation and blended finance from Alliance members, other development finance institutions, commercial financial institutions, and foundations; public and private global and African institutional investors; project sponsors; and multilateral development banksβ sovereign operations and G-20 bilateral donors.
Adesina explained that Alliance members will come together to use their collective efforts to expedite Africaβs transition to Net-Zero by bridging the climate-resilient infrastructure gap, thus helping Africa to meet its global development ambitions.
