African Development Bank is boosting the promotion of resilient, green and sustainable growth, with the launch of the African Green Bank Initiative, a model for deploying green financing across the continent.
Part of the African Financial Alliance on Climate Change (AFAC), the Green Bank Initiative will be supported by the African Green Finance Facility Fund (AG3F). AG3F will provide technical assistance to governments and financial institutions in creating and capitalizing green facilities, co-invest alongside those in green projects and provide de-risking instruments to increase private sector mobilization.
The Green Bank Initiative is a powerful tool for reducing financing costs and mobilizing private sector investments in climate action in Africa.
The African Green Bank initiative, which will be endowed with a trust fund of $1.5 billion, was conceived as part of measures to facilitate access to global finance from the current 3% to 10% annually by 2030.
African countries still face significant challenges in financing their climate transition. While investment needs resulting from NDCs are estimated at $2.8 trillion by 2030, funds invested on the continent still represent a limited share of global green finance flows, and the share covered by the private sector remains limited.
European asset management firm Amundi will back the initiative through technical assistance activities, including training green facilities’ management and investment teams. Amundi will also mobilize its investment vehicles dedicated to sustainable development in emerging markets and developing economies to support green facilities’ capitalization and thus participate in the development of green investment across the continent.