Dr Akinwumi Adesina, the President of the African Development Bank (AfDB), has stated that Africa needs to prioritise investments in green infrastructure through private sector financing.
Adesina said this at the AfDB’s current 2023 Annual General Meeting in Sharm El Sheikh, Egypt. In the previous ten years, the AfDB had issued bonds with a total value of over $10 billion.
According to the AfDB boss-
“Economies must compliment public finance by mobilising resources from the private sector for the development of the continent.
“To mobilise more climate financing, AfDB inaugurated the African Financial Alliance for Climate, adding that this was with a view to bringing together all financial institutions, and stock exchanges in Africa to green the financial ecosystem.
“Financial ecosystem should incorporate climate financing into all their operations. Valuation of companies on the stock exchanges based on the greening on their portfolios will provide incentives for green investment across Africa.
“The use of green bonds can mobilise global refinancing for Africa and that is because Africa currently accounts for just 0.2 per cent of the 2.2 trillion dollars or cumulative green bonds issued up till 2022”, he stated.
The programme will speed up private sector investments in energy, green urban infrastructure systems, green hydrogen, and climate-resilient infrastructure, according to the head of the AfDB.
He added that the group hoped to mobilise 500 million dollars of project preparation and project development financing using climate equity platforms and 10 billion dollars in private sector financing for green infrastructure in Africa.
“A good example, is our recent provision of 195 million euros as partial credit guarantee to spur republic of Benin, to raise 500 million dollars on global capital markets.
“Our Board of Directors approved a 345 million dollars partial credit guarantee to support Egypt to raise 500 million dollars for private financing for green growth through issuance of its first-ever sustainability Panda bond.
“As the world moves, the transition to electric power abounds; Africa stands to be able to attract billions of dollars in private investment for greening global transport system.
“This is because it has 80% of the global deposits of platinum, 50% of cobalt, 40% of nickel and substantial deposits of lithium.”
Adesina cautioned Africa not to repeat its mistakes and to instead step up its production of lithium-ion gas in order to access the market in the future.
He claims that setting up lithium ion in Africa would be three times less expensive.
He suggested that governments and development partners should adopt five crucial strategies in order to mobilise far more private climate change and green growth.
According to him, they should create a national development strategy for the green transition. They should also subsidise green energy to promote economic growth. Furthermore, they can rely on bilateral and multilateral institutions to back their risky investments by the private sector.
He said that assistance should be given for planning and developing bankable projects. These would offer the private sector significant risk-adjusted returns.
The existing public financing infrastructure should be handed to the private sector. This, he further added, will mobilise more private sector funding for greener infrastructure.
Beginning on May 22 and lasting till May 26, the AfDB 2023 annual meetings are being held.
The gatherings include the 58th Annual Meeting of the Board of Governors of the African Development Bank. It also included the 49th Meeting of the Board of Governors of the African Development Bank.
“Mobilising Private Sector for Climate and Green Growth in Africa” is the subject of the 2023 Annual Meetings.
The gathering is anticipated to give Bank Group Governors a forum. This will enable them to discuss their successes and failures in fostering local and international private funding. It is anticipated that it will also help Africa shift to green growth. Particularly by using natural resources to close the financial gap in the continent’s climate change efforts.
cc: Vanguard Ng
