"Let's help Africa fully leverage the power of green bonds," says AfDB Vice President Hassatou N'Sele. Alliance envisages €15-20 billion in green investments
01-Dec-2023
The African Development Bank Group signed a joint partnership agreement with the coalition of development finance institutions of the Global Green Bond Initiative to collaborate on technical assistance to promote green bond markets in Africa. Africa's engagement in the green bond market currently represents less than 1 percent of more than $2.2 trillion in community green bond issuance in 2022.
The Global Green Bond Initiative coalition comprises the European Investment Bank, the European Bank for Reconstruction and Development, Italy's Cassa Depositi e Prestiti, the Spanish Agency for International Development Cooperation, Germany's KfW development bank, PROPARCO of the AFD Group, acting as a consortium of European development finance institutions, and the Green Climate Fund.
African Development Bank Group Vice President and Chief Financial Officer, Ms Hassatou N'Sele, signed the declaration with representatives of the coalition's member institutions on the sidelines of the 2023 UN Climate Change Conference (COP28) in Dubai, United Arab Emirates.
This new strategic partnership forms part of the Global Green Bond Initiative technical assistance programme that was announced by European Commission President Ursula von der Leyen in June 2023.
The Initiative will help private capital flow from institutional investors into climate and environmental projects in EU partner countries, increasing their access to capital by providing technical assistance to green bond issuers in emerging markets and developing economies (EMDEs), and crowding in private investors through a dedicated de-risked fund, which will act as an anchor investor in green bonds issued in EMDEs. The anticipated impact could be up to €15-20 billion in green investments.
To further strengthen the technical assistance arm of the GGBI, the coalition also works with strategic partners, including regional development banks such as the African Development Bank, to support the origination of green bonds, the development and identification of pipelines of green projects, and the development of credible and coherent green bond frameworks.
Ms N'Sele welcomed the partnership: "This joint declaration among us to collaborate on technical assistance on green bonds in Africa is our commitment to work together, and it is significant and impactful. There cannot be impactful development in Africa without vibrant local capital markets."
N'Sele highlighted the African Development Bank's engagements in the green bond market, including issuing over $10 billion worth of green and social bonds last year to support sustainable progress across Africa: "Let's help Africa fully leverage the power of green bonds, and we can contribute together towards a sustainable future for Africans."
Stefano Signore of the European Commission's partnerships directorate, described the partnership with the African Development Bank as an important milestone in efforts to mobilise green bonds in emerging developing economies: "With the partnership of the African Development Bank, we hope we can contribute to the intensification of climate and environmentally relevant projects and pipeline that can set off the mobilization of the global green bond initiative,"
About AECID
AECID, the Spanish Agency for International Development Cooperation, is the main management body of the Spanish Cooperation, aimed at poverty reduction and sustainable human development. Its strategic roadmap, in line with Agenda 2030, is the 5th Master Plan for Spanish Cooperation, based on a human rights approach, which pays special attention to cross-cutting issues of gender, environmental quality and respect for cultural diversity.
About the AfDB
The African Development Bank Group is a regional multilateral development finance institution established in 1964 to spur sustainable economic development and social progress in its regional member countries, thus reducing poverty. It achieves this objective by mobilising and allocating resources for investment in its RMCs and providing policy advice and technical assistance to support development efforts.
About Cassa Depositi e Prestiti
Cassa Depositi e Prestiti (CDP), Italy's national promotional institute, has been supporting the Italian economy since 1850. Its main goal is to accelerate Italy's industrial and infrastructural development to boost its economic and social growth. CDP activities focus on sustainable development at the local level, supporting the innovation and growth of Italian enterprises in the international arena. It also participates actively in international cooperation initiatives to realise projects in developing countries and emerging markets.
About the Green Climate Fund (GCF)
GCF is the world's largest dedicated climate fund, aiming to foster a paradigm shift towards low-emission, climate-resilient development pathways in developing countries. GCF has a portfolio of $12.8 billion ($48.3 billion including co-financing), delivering transformative climate action in more than 120 countries. Its readiness support programme builds capacity and helps countries develop long-term plans to fight climate change. GCF is an operating entity of the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC) and serves the 2015 Paris Agreement, supporting the goal of keeping average global temperature rise well below 2°C.
About the European Investment Bank
The European Investment Bank (EIB) is the European Union's long-term financing institution, owned by its Member States. EIB finances sound investments that contribute to EU policy goals by supporting projects in infrastructure, innovation, climate and environment, and small and medium-sized enterprises. EIB Global carries out operations outside the European Union. As a key partner in the EU's Global Gateway, EIB aims to support at least €100 billion of investment by the end of 2027, one-third of the strategy's target. With offices worldwide, EIB Global is close to local people, firms and institutions, and fosters strong Team Europe partnerships with development finance institutions.
About the European Bank for Reconstruction and Development
The EBRD is a multilateral bank that promotes the development of the private sector and entrepreneurial initiatives in 36 economies across three continents. The Bank is owned by 72 countries, as well as the EU and the EIB. EBRD investments aim to make the economies in its regions competitive, inclusive, well-governed, green, resilient and integrated. As a strategic partner of the EU, the Bank actively contributes to the delivery of the EU Global Gateway through investment, policy reform and advisory projects. To drive the green and digital transition and ensure gender and economic inclusion, the EBRD invests in projects in multiple sectors, such as transport, energy, digital, municipal infrastructure and critical raw materials. It collaborates closely with stakeholders in local and international business, investment and development communities. It operates from its Headquarters in London, with a vast network of Resident Offices and satellite offices with over 1,000 staff across 35 countries.
About KfW
KfW Bankengruppe, founded in 1948, is the German promotional bank and one of the world's leading promotional banks. It is 80% owned by the German federal government and 20% by the federal states.
The business sector KfW Development Bank carries out financial cooperation projects with developing countries and emerging economies on behalf of the German federal government, especially on behalf of the Federal Ministry for Economic Cooperation and Development. KfW Development Bank employs approximately 1,200 people at its head office in Frankfurt am Main and 400 specialists at more than 60 international locations, who cooperate with partners worldwide to combat poverty, secure peace, protect the environment and the climate and ensure fair globalisation. KfW Development Bank is a competent and strategic advisor for current development policy issues.
About Proparco
Proparco is a subsidiary of the AFD Group focused on private sector development. It has promoted sustainable economic, social and environmental development for over 45 years. Proparco provides funding and support to businesses and financial institutions in Africa, Asia, Latin America and the Middle East. Its action focuses on the key development sectors: infrastructure, mainly for renewable energies, agribusiness, financial institutions, health and education. Its operations aim to strengthen private players' contribution to achieving the Sustainable Development Goals adopted by the international community in 2015. To this end, Proparco finances companies whose activity contributes to creating jobs and decent incomes, providing essential goods and services and combating climate change.
Contact:
Kwasi Kpodo, Communication and External Relations Department, African Development Bank Group [email protected]
