Abdou Aziz Diedhiou, Head of Studies and Strategy, La Banque Agricole Sénégal; Kossivi Domegni, Expert in Energy Efficiency and Renewable Energy, Togo; Audrey-Cynthia Yamadjako, Coordinator, African Green Finance Facility Initiative, African Development Bank; Kevin Kariuki, Vice President for Energy, Climate and Green Growth at the African Development Bank; Doug Sims, Senior Green Finance Advisor and Co-Founder of the global Green Bank Network; Craig Weise, CEO of New Zealand Green Investment Finance; Thimotee Jaulin, Head of Development and Advocacy, ESG, Amundi; and Gareth Phillips, Manager, Climate and Environment Finance Division, African Development Bank
The African Development Bank is driving the promotion of resilient, green and sustainable growth with the launch of the African Green Bank Initiative, a model for rolling out green finance across the continent.
The initiative, which was launched at the recently concluded United Nations Conference on Climate Change (COP27) in Egypt, will support the implementation of Nationally Determined Contributions (NDCs) by African countries.
As part of the African Climate Finance Partnership (AFAC), the Green Bank Initiative will be supported by the African Green Finance Facility Fund (AG3F). AG3F will provide technical assistance to governments and financial institutions to create and capitalize green facilities, invest together with them in green projects, and provide de-risking instruments to increase private sector mobilization.
Launching the initiative, African Development Bank Vice President for Energy, Energy, Climate and Green Growth Kevin Kariuki said the African Green Bank model would help increase the continent’s access to global climate finance.
“The Green Bank Initiative is a powerful tool to reduce financing costs and mobilize private sector investment in climate action in Africa,” said Kariuki.
He said that multilateral development banks and international financial institutions had a crucial role in enabling local financial institutions to develop a green portfolio of projects and facilitating their access to resources.
The African Green Bank initiative, which will have a trust fund of 1.5 billion dollars, was conceived as part of the measures to facilitate access to global financing from the current 3% to 10% per year by 2030.
Kariuki said the initiative was based on an assessment by the African Development Bank and Climate Investment Funds of the potential for Green Banks in six African countries, namely Benin, Ghana, Mozambique, Tunisia, Uganda and Zambia.
“The assessment revealed that green banks have significant potential to attract new sources of catalytic funds by supporting climate resilient and low carbon development by combining capital and mobilizing local private investment for green investments in Africa” , said.
Kariuki said the initiative would bolster the ability of local financial institutions to build a strong portfolio of bankable green projects, while reducing investment risk and bolstering long-term investor confidence in low-carbon and climate-resilient projects. in Africa.
“It will do this by investing in sectors such as energy efficiency and renewable energy, climate-smart agriculture, resilient infrastructure and nature-based solutions,” he said.
African countries still face significant challenges in financing their climate transition. While investment needs resulting from NDCs are estimated at USD 2.8 trillion by 2030, funds invested in the continent still represent a limited share of global green financial flows, and the share covered by the private sector remains limited. .
The launch event featured a panel discussion on opportunities to establish an ecosystem of green finance facilities in Africa. Panelists included climate finance professionals, asset managers, African commercial banks and existing green banks.
Audrey-Cynthia Yamadjako, coordinator of the initiative, said green finance facilities, newly created or housed in existing financial institutions, were “the solution to bring private finance to scale on climate action through translation of the needs NDC implementation plan of $2.8 trillion in well-structured and bankable projects.”
European asset management company Amundi will support the initiative through technical assistance activities, including training of investment teams and management of green facilities. Amundi will also mobilize its investment vehicles dedicated to sustainable development in emerging markets and developing economies to support the capitalization of green facilities and thus participate in the development of green investments across the continent.
