Africa Finance Corporation (AFC) has created an asset management arm, AFC Capital Partners, which plans to raise $500 million in the next one year and $2 billion over the next three years.
The move is part of the drive to address the continent’s vulnerability to climate risk, said the pan-African multilateral development financial institution which was established by sovereign African states in 2007.
AFC Capital Partners’ debut offering is the Infrastructure Climate Resilience Fund (ICRF). The fund will act as a direct investor and a co-investment fund to improve the quality of ports, roads, bridges, rail, telecommunications, clean energy and logistics in Africa.
“AFC Capital Partners will enhance our firepower in driving integrated infrastructure solutions that are core to Africa’s development in the post-COVID era,” said Samaila Zubairu, president and CEO of AFC.
“The [fund] will enable us to support climate adaptation as well as projects that reduce carbon emissions and catalyse our continent to build back better, with more climate-resilient and sustainable infrastructure.”
AFC is the second-highest investment grade rated multilateral financial institution in Africa. It was established to catalyse private sector-led infrastructure investment across the continent.
Africa has been among those exposed to the devastating effects of climate change because its housing, transport, industrial and energy structures are ill-equipped to survive storms, floods, droughts, wildfires and other hazards from extreme weather events.
Without urgent intervention, the UN Office of Disaster Risk Reduction estimated that the cost of structural damage caused by natural disasters will increase to $415 billion a year by 2030, from around $250 billion to $300 billion now.
“Damage to rail tracks, roads, bridges, seaports and power grids will add to an infrastructure deficit currently at $130 to $170 billion per year,” AFC said in a statement.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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© ZAWYA 2021