The African Development Bank organized at its Annual Meetings in Marrakesh, Morocco, a high-level side event, "Innovative Financing for a Green Economy," on May 30 discussing how African stakeholders can attract private sector finance, particularly from pension and sovereign wealth funds, to finance a low carbon and climate resilient economy in Africa.
The newly designed Africa50Fund designed by the AfDB to unlock private financing and accelerate the speed of infrastructure delivery in Africa was announced.
These private sector funds have the potential to deploy proven, existing technologies to help address increasing shortages of key resources needed to achieve sustainable socio-economic development in such sectors as clean, renewable energy, drinking water, food processing, and local cost health care delivery.
The mobilization of these financial resources will be essential to financing Africa's infrastructure needs and also contribute to achieving the dual objectives of the Bank's Ten-Year Strategy (2013-2022) which are: (i) supporting inclusive growth and (ii) the gradual transition to green growth.
This panel has drawn on the leadership and best practice experience of Club de Madrid Members composed of more than 90 democratic Heads of State and Government from over 60 countries. Former President of Botswana Festus Mogae and Former President of Tanzania Benjamin Mkapa, representing the Club de Madrid, have highlighted the needs for financing the green economy in Africa through some projects in the energy, water, transport and agriculture sectors. Both agreed: "There is no shortage of bankable projects in Africa".
"There must be a good investment climate to facilitate financing. This investment climate is improving in many countries," Mpaka emphasized.
The panel benefited from the experience of representatives of the P80 Group Foundation, which owes its origins to the inspiration of HRH Prince Charles who believed that the world's largest pension and sovereign wealth funds could be encouraged to increase the level of their investments directed towards climate and/or sustainable development.
Eugene Yun, Managing Director of the P80 Group Foundation, explained that innovative financial conduits were needed in order to deploy the large investments that pension and sovereign wealth funds want to make in green projects in Africa.
Trustful institutions like the AfDB can help us invest in good green projects on the continent," he said. Alfred Watkins, Executive Chairman of the P80 Group Foundation's Global Innovation Summit, illustrated how the mobilization of these funds can be a game changer in moving technology and making it available to African countries.
In that context, AfDB Vice-President, Finance, Charles Boamah showcased the capacity of the Bank in mobilizing much needed available private sector funds and establishing innovating financing facilities such as the Africa50Fund.
The fund will leverage AfDB's convening power and knowledge and will benefit from the Bank's extensive presence on the continent. He announced that the Fund will have an initial drawdown of US $3 billion and would aim at financing projects of a total of US $100 billion.
