By Oforiwa Darko
In a powerful signal of support during COP28 in Dubai, African and global institutions together with governments of Germany, France and Japan and philanthropies have pledged over $175 million to the Alliance for Green Infrastructure in Africa (AGIA). The landmark initial pledge will help to rapidly scale up financing for transformative climate-aligned infrastructure projects across the continent.
The new pledges will also advance AGIA towards its first close of $500 million of early-stage project preparation and development blended capital. The Alliance is a partnership of the African Union Commission, the African Development Bank, Africa50 and other partners. It works to unlock up to $10 billion private capital for green infrastructure projects and to galvanise global action to accelerate Africa’s just and equitable transition to Net-Zero.
Among the signatories of the memorandum of intent were representatives of the African Development Bank, Africa50, France, Germany, Japan, the Arab Bank for Economic Development in Africa (BADEA), Banque Ouest-Africaine de Développement (BOAD), Proparco and the Three Cairns Group. The Union of the Comoros President and Chairperson of the African Union Azali Assoumani, Madagascar’s President Andry Rajoelina and African Union Commission Chairperson Moussa Faki Mahamat witnessed the signing ceremony.
Germany’s Minister for Economic Cooperation and Development, Mrs Svenja Schulze, congratulated the African Development Bank on this important Africa-led initiative and emphasised AGIA’s commitment to the 1.5 °C target and its dedication to accelerate Net-Zero emissions in Africa.“Today marks an important step towards our shared goal of a just and equitable green transition in Africa. Supporting the commitment towards green infrastructure, we are planning to contribute up to €26 million to AGIA starting in 2024” she noted.
The report “Renewable Energy Market Analysis: Africa and its Regions” shows that Africa is prospering significantly from development enabled by renewables, while greatly improving energy access and offering profound welfare and environmental benefits to people across the continent. Coal, natural gas and oil together account for about 70 per cent of Africa’s total electricity generation today and conventional power attracts far more funding than renewables in Africa, owing to an established process that favours less capital-intensive thermal generation, the report notes. Energy transition finance must become more readily accessible.
Tomoyoshi Yahagi, Japan’s Deputy Vice-Minister of Finance, said that part of the pledge made by Japan will provide US$10 million to AGIA to support Africa in undergoing a just and equitable transition to Net-Zero and achieving the 1.5 °C pathway. He called on other donors to contribute to the initiative. According to the African Development Bank Group’s President, Dr Akinwumi Adesina, there is a need for private sector financing at scale to tackle climate change and fill Africa’s huge infrastructure gap in a sustainable and climate-resilient manner.
“By working together and pooling our resources together through AGIA, we are committed to accelerating these efforts. The Bank Group plans to contribute up to $40 million, after approval from its Board of Directors,” he said.
Of the USD 2.8 trillion invested in renewables globally between 2000 and 2020, only two per cent went to Africa, despite the continent’s enormous renewable energy potential and its need to bring modern energy to billions of citizens still lacking access. While the rate of access to energy in Sub-Saharan Africa rose from 33 per cent to 46 per cent over the last decade, rapid population growth meant 570 million people still lacked electricity access in 2019, 20 million more than 10 years ago. About 160 million more people lacked access to clean cooking over the same period.
AGIA is set to become Africa’s largest fund focused on project development, which is a critical component to scale up the delivery of bankable green projects and help the continent achieve its climate goals. This initial fundraising round which includes strong African and international organisations, is seen as a great sign of investor confidence in AGIA. Africa50 is the fund manager for AGIA.
