The board of directors of the African Development Bank (AfDB) has made a significant decision to invest $30 million in the Africa Finance Corporation (AFC). This investment aims to support various climate-related projects throughout Africa.
According to the parties involved in this agreement, the money will primarily be used to develop solar power plants and energy storage systems, among other initiatives. This investment is part of AFC’s new ‘green shares’ program, which is designed to attract funding for projects that have a positive environmental impact.
The ‘green shares’ initiative will help generate substantial financial resources for important projects, which include the construction of wind and solar power plants in countries like Djibouti and Egypt, as well as energy storage systems in Cabo Verde. By using this investment, AFC plans to secure additional funding from other sources, such as capital markets, which will then be lent out to various sub-projects.
This investment is expected to create over 1,600 full-time jobs by the year 2031. Additionally, it aims to promote regional cooperation and provide clean, reliable energy to millions of households across Africa. The initiative is also focused on supporting economic growth and creating opportunities for disadvantaged groups, including women and people living in rural areas.
It’s important to note that Africa faces significant challenges related to climate change, even though the continent contributes less than 3% of global carbon emissions. There is also a massive annual funding gap of $170 billion for infrastructure projects in Africa. The AfDB’s investment is intended to help AFC establish a sustainable financing system that can address these challenges, create economic opportunities, and improve Africa’s ability to cope with climate change.
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Solomon Quaynor, the Vice President of the AfDB for Private Sector, Infrastructure, and Industrialization, emphasized that this partnership between AfDB and AFC showcases how strategic collaborations can lead to transformative changes. He believes that this initial investment in AFC’s green shares will attract more investors from both the region and around the world, demonstrating that Africa is poised to take the lead in sustainable growth.
Banji Fehintola, who is an Executive Board Member and the Head of Financial Services at AFC, expressed gratitude for AfDB’s investment. He highlighted the importance of sustainable financing in addressing Africa’s climate and infrastructure issues and emphasized their shared goal of promoting transformative change across the continent. By partnering with AfDB, AFC aims to implement solutions that support Africa’s transition to a greener economy and its long-term development.
Ahmed Attout, the AfDB’s Director for Financial Sector Development, noted that this partnership with AFC represents a significant step forward in their efforts to attract both local and international investment into projects that enhance climate resilience and promote sustainable growth.
