The African Union, the African Development Bank Group and Africa50—in partnership with several global partners—have launched the Alliance for Green Infrastructure in Africa (AGIA), an initiative to help scale and accelerate financing for green infrastructure projects in Africa, AFDB said in a press statement.

“The alliance to raise up to $500 million of early-stage project preparation and development capital. The goal is boost project bankability and generate up to $10 billion in investment opportunities for the private sector”, said the statement released on the sidelines of the ongoing COP 27 climate summit at Sharm- El -Sheik, Egypt.

This will be mobilised from a combination of co-investments, co-financing, risk mitigation and blended finance provided by Alliance members. This capital will also be drawn from other financial institutions and foundations, public and private global and African institutional investors, project sponsors, multilateral development banks’ sovereign operations, and from G-20 bilateral donors, the statement noted.

The Alliance’s focus sectors are energy, transport, water and sanitation, health infrastructure, broadband infrastructure, urban and rural infrastructure. It will support large-scale programs, such as mega solar projects or green hydrogen projects, as well as smaller venture capital initiatives like cleantech projects, energy storage or e-mobility solutions, it added.

The partners have identified four pillars for collective action:

Project Preparation and Development – To support the transformation of projects from concept to bankable propositions and develop a strong pipeline of bankable green infrastructure projects.

Project Ratings – To establish green eligibility criteria and project rating guidelines for infrastructure projects and provide technical assistance to build capacity within the public sector.

Co-financing and De-risking – To provide the requisite de-risking instruments to facilitate investment and develop a clear framework to mobilize equity and debt financing for green infrastructure from AGIA members and other sources.

Institutional Investors – To facilitate the mobilization of funds from global and African institutional investors and leveraging African and international capital markets to drive green bond issuances and financing for projects.

African Development Bank Group President Dr Akinwumi Adesina said: “Africa needs infrastructure financing, estimated at between $130 billion to $170 billion a year, with an infrastructure financing gap of up to $108 billion a year. Most of the infrastructure for Africa is yet to be built. This presents an enormous opportunity to get it right. Build green infrastructure that is climate-smart and that is climate-resilient.”

(Writing by Sowmya Sundar; Editing by Anoop Menon)