African, global partners to raise $500m for green infrastructure

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BY BAMIDELE FAMOOFO

Uba Group

The Alliance for Green Infrastructure in Africa will raise up to $500 million to provide early-stage project development capital. This is capital that will build a robust pipeline of bankable projects, starting with pre-feasibility stage all the way through to commercial and financial close.

This is projected to generate up to $10 billion worth of investments in green infrastructure. This will be mobilized from a combination of co-investments, co-financing, risk mitigation and blended finance provided by Alliance members. This capital will also be drawn from other financial institutions and foundations, public and private global and African institutional investors, project sponsors, multilateral development banks’ sovereign operations, and from G-20 bilateral donors.

The Alliance’s focus sectors are energy, transport, water and sanitation, health infrastructure, broadband infrastructure, urban and rural infrastructure. It will support large-scale programs, such as mega solar projects or green hydrogen projects, as well as smaller venture capital initiatives like cleantech projects, energy storage or e-mobility solutions.

In introductory remarks, African Development Bank Group President Dr. Akinwumi Adesina said: “The AGIA platform is a new platform that is fully aligned with the global call of the G7 leaders in June this year when they called for the partnership on global infrastructure and investment to mobilize $600 billion in infrastructure by 2027, especially to support sustainable, quality and climate-resilient infrastructure.”

Adesina added: “We need you all, as the needs in Africa are simply enormous. Only by working together and pooling our resources together can we make transformative impacts and set Africa on a clear path to achieving NetZero emissions and to mitigate climate change. Africa needs infrastructure financing, estimated at between $130 billion to $170 billion a year, with an infrastructure financing gap of up to $108 billion a year.

“But most of the infrastructure for Africa is yet to be built. This presents an enormous opportunity to get it right. Build green infrastructure that is climate-smart and that is climate-resilient.”

African Union Commissioner for Energy and Infrastructure Dr. Amani Abou-Zeid said: “As African institutions, we must focus on early-stage project preparation, de-risking interventions, and building a robust business environment to attract investors from all parts of the world. We want to galvanize around priority projects that combine all our efforts to deliver. We must now intensify our efforts and move faster and at scale.”

Africa50 CEO Alain Ebobissé said: “I’m excited about AGIA’s mandate. It’s an initiative that is results-oriented, rapidly scaling projects from the concept stage to bankability. I look forward to partnering with more development institutions and private sector players within Africa and globally, to leverage additional resources, so we can deploy the $10 billion we have set as target for AGIA’s green, sustainable infrastructure investments.”

Held at the COP27 Africa Pavilion, the ceremony brought together global leaders, heads of development finance institutions and private sector business representatives. It included a panel discussion on the theme “Alliance for Green Infrastructure in Africa: a path forward for African countries to accelerate their transition to Net-Zero.”

The panel featured African Union Commissioner Dr. Amani Abou-Zeid; Africa50 CEO Alain Ebobissé; Ithmar Capital CEO and Chairman of the Africa Sovereign Investors Forum Obaid Amrane; Global Center on Adaptation CEO Patrick Verkooijen; Rockefeller Foundation President Dr. Rajiv J. Shah; European Investment Bank Vice President Ambroise Fayolle and former UK Prime Minister, The Right Honourable Tony Blair.

European Investment Bank Vice President Ambroise Fayolle commented: “Project preparation and access to finance are among the main barriers to making Africa’s infrastructure green and climate resilient. Today’s announcement of the Alliance for Green Infrastructure in Africa marks an important milestone to accelerate and scale up finance from public and private sources. The EIB is delighted to join the Alliance and work closely with the African Union, African Development Bank, Africa50 and partners to make this new initiative a success.”

Rockefeller Foundation’s Rajiv Shah said: “Africa is on the front lines of the world’s climate, energy and food crises, yet it has contributed the least to these crises. The continent is only responsible for about 3% of historic greenhouse gas emissions. With innovative initiatives like the Alliance for Green Infrastructure in Africa. The people of Africa can lead a clean energy revolution that averts climate catastrophe and extends the reach of electricity access and economic opportunity across the continent.”

Ithmar Capital’s Obaid Amrane said: “AGIA is here to bring some solutions. I am convinced that we can green Africa, both in the generation of electricity and to help Europe green its industry. It’s also an opportunity to create jobs for youth.”

The European Investment Bank’s Ambroise Fayolle said: “What we like in this initiative is that it touches on two things that are paramount: the opportunity to boost project preparation and bring in private capital. We would be pleased to bring the capital needed to make these projects successful. Climate is a key priority for the EIB and the European Union. Our mandate is to make sure that we support green projects in Africa. Africa is already almost half of our portfolio. This alliance’s pragmatic approach makes me optimistic. We must bring things that are replicable and that we can replicate in projects in various parts of Africa. What will matter is whether we are able to deliver quickly.”

In his closing remarks, Tony Blair said: “We are only going to solve this problem by taking strong actions which are based on practical plans and implementation. It is important for governments to grow in a sustainable way. The question is not just how we manage to get the finance and investment into Africa but also how governments themselves prepare for the absorption of that finance and that’s the other side of the equation, and that is why project preparation is so important.

“It’s always a partnership. I don’t think the problem is a lack of will or appetite on the part of Africa’s people or their governments. It’s a question of organization, of getting the right elements in place to make the vision a reality. And if I learnt anything in government, it’s that the hardest thing is to get things done. We can write the reports and have the great visions. But ultimately, it’s about implementation.”