Global, African organisations pledge $175m in solidarity for Africa green infrastructure

7 December 2023

Source: Business Am

In a powerful show of support at COP28, a coalition of African and global institutions, as well as the governments of Germany, France and Japan and philanthropies, have committed more than $175 million to the Alliance for Green Infrastructure in Africa (AGIA). 

The commitment to the AGIA was made by a diverse coalition of organizations, including representatives from the African Development Bank, Africa50, France, Germany, Japan, the Arab Bank for Economic Development in Africa, the West African Development Bank, Proparco, and the Three Cairns Foundation

The signing of the Memorandum of Understanding (MoU) for the AGIA was witnessed by a number of prominent figures, including Azali Assoumani, president of the Union of the Comoros and chairperson of the African Union, Andry Rajoelina, president of Madagascar, and Moussa Faki Mahamat, chairperson of the African Union Commission. 

The new commitments made at COP28 bring the AGIA closer to its goal of raising $500 million in early-stage blended capital to support the development of green infrastructure projects. The Alliance, a joint initiative of the African Union Commission, African Development Bank, Africa50, and other partners, seeks to leverage private sector investment to support green infrastructure development in Africa. 

In her remarks at the launch of the AGIA, Svenja Schulze, Minister for Economic Cooperation and Development of Germany, expressed support for the initiative and the efforts of the African Development Bank to address climate change. She specifically highlighted the AGIA’s commitment to the 1.5°C target and accelerating Africa’s transition to net-zero emissions. Minister Schulze stated that Germany would contribute up to €26 million to the AGIA starting in 2024.

Tomoyoshi Yahagi, deputy vice-minister of finance of Japan, emphasised that Japan has pledged to provide $10 million to the AGIA. He highlighted Japan’s strong belief in the AGIA’s potential to drive Africa’s transition to net-zero emissions, noting that this would help the continent stay on track to meet the 1.5°C target. Yahagi also called on other countries to support the initiative, highlighting its importance in achieving sustainable development in Africa.

Emmanuel Moulin, director general of the French Treasury, noted that the AGIA is well-positioned to address the funding gap for green infrastructure projects in Africa. This, he said, is crucial to achieving net-zero emissions on the continent. He also stressed that the initiative aligns with France’s policy of solidarity for sustainable investment in Africa, and that France has been a strong supporter of the initiative from the beginning. In addition, Moulin announced a €20 million contribution from France, with the goal of leveraging additional private and concessional resources to support the AGIA. 

On his part, Akinwumi Adesina,the AfDB president highlighted the urgent need for private sector financing to address climate change and fill Africa’s infrastructure gap in a sustainable and climate-resilient manner. He stated that the AGIA would help to accelerate these efforts by bringing together partners and leveraging resources. He also noted that the Bank Group plans to contribute up to $40 million, pending approval from its board of directors.

In his remarks, Sidi Ould Tah, president of BADEA, expressed the organisation’s support for the AGIA and its commitment to advancing Africa’s sustainable development through investments in green infrastructure. BADEA has pledged $40 million to support the initiative, reflecting the organisation’s belief in the importance of this partnership in enabling transformational green infrastructure projects in Africa and accelerating the continent’s transition to net-zero emissions. 

In Alain Ebobissé’s view, AGIA has the potential to become Africa’s largest fund focused on project development, which is crucial for scaling up the delivery of bankable green projects and helping the continent meet its climate goals. The Africa50 CEO noted that the strong participation of African and international organisations in the initial fundraising round indicates investor confidence in the initiative.

Serge Ekué, president of BOAD, stated that the organisation’s 2021-2025 Djoliba strategic plan includes a commitment to allocate 25 per cent of its new financing to projects that strengthen the resilience of its member countries to climate change. Ekué highlighted that the organisation’s interest in AGIA is consistent with this strategy and will help to mobilize additional climate finance in the region.

Proparco CEO Françoise Lombard emphasizsd that the company is pleased to support AGIA alongside the French government, as the initiative seeks to address a major challenge in green infrastructure development in Africa: the lack of bankable projects. Lombard stated that the AGIA’s blended structure, which combines public and private resources, is innovative and will help to fund the riskier stages of infrastructure projects, such as project preparation and development.

In a statement of support for AGIA, Mark Gallogly, co-founder of the Three Cairns Foundation, dwelled on the importance of the initiative’s mission to drive economic development and green infrastructure in Africa. He also stressed the need for more risk-tolerant, early-stage equity to increase the number of clean energy and climate-related projects in Africa.