KEY POINTS
- African Development Bank invests $30 million in Africa Finance Corporation’s green shares to support renewable energy and sustainable infrastructure projects across Africa.
- The initiative targets reducing Africa’s $170 billion annual infrastructure funding gap and fostering climate resilience through impactful renewable energy projects.
- The investment aims to create 1,600 jobs, expand clean energy access, and inspire global funding for Africa’s green transition by 2031.
The African Development Bank (AfDB) has approved a $30 million equity investment in the Africa Finance Corporation (AFC) through the issuance of innovative “green shares,” marking a significant step toward financing climate action across Africa.
According to Zawya, this initiative aims to mobilize global resources to fund renewable energy projects and sustainable infrastructure development, addressing the continent’s pressing climate and infrastructure challenges.
Promoting green growth and climate resilience
The investment, announced in December 11, 2024, will enable AFC to secure additional debt funding from global capital markets. These funds will be directed toward impactful sub-projects, such as wind and solar energy facilities in Djibouti and Egypt, and energy storage solutions in Cabo Verde.
Solomon Quaynor, AfDB’s Vice President for Private Sector, Infrastructure and Industrialization, underscored the strategic importance of the partnership. “This collaboration exemplifies the transformative power of strategic alliances. The AfDB’s first-mover investment in AFC’s green shares is expected to attract other regional and global investors, amplifying the impact of this initiative and sending a strong signal that Africa is ready to lead the way in green growth,” he said.
Addressing infrastructure gaps
Africa faces a $170 billion annual shortfall in infrastructure funding, compounded by climate challenges despite contributing less than 3% of global carbon emissions. Our eco-focused equity investments will not only enhance Africa’s climate resilience but also generate significant economic opportunities.
Banji Fehintola, a member of AFC’s Executive Board and Head of Financial Services, praised the AfDB’s commitment. “The $30 million investment underscores the critical role of sustainable financing in tackling Africa’s climate and infrastructure challenges. Together, we are advancing impactful solutions to support the continent’s green transition and long-term development,” he said.
Transformational impact
The initiative is expected to deliver wide-ranging benefits by 2031, including the creation of over 1,600 full-time jobs, expanded access to clean and reliable energy for millions of African households, and enhanced economic opportunities, particularly for women and marginalized rural communities.
Ahmed Attout, AfDB’s Director for Financial Sector Development, emphasized the partnership’s significance, calling it a “major milestone in channeling domestic, regional, and global capital into projects that build climate resilience and foster sustainable growth.”
About Africa finance corporation
Founded in 2007, AFC focuses on driving sustainable economic development through infrastructure investments across Africa. With over $13 billion allocated to projects in 43 member countries, AFC has established itself as a trusted partner in energy, natural resources, transportation, telecommunications, and heavy industry.
The AfDB’s equity stake in AFC’s green shares program is anticipated to inspire further investments from regional and global stakeholders, accelerating Africa’s green transition and addressing critical development challenges.
