The pan-African financial institution is to release $30 million for the construction of wind and solar power plants in Djibouti and Egypt and the development of energy storage systems in Cape Verde.
The Board of Directors of the African Development Bank (AfDB) has approved a $30 million strategic investment in the African Finance Corporation (AFC) to support the deployment of innovative climate change solutions across the African continent, according to a statement received by APA on Friday.
The initiative, announced on December 11, 2024, aims to mobilise resources to finance high-impact projects and accelerate the transition to a green economy in Africa.
The AfDB’s investment will take the form of “green shares,” innovative financial instruments designed to attract capital for priority climate change projects. These initiatives include the construction of wind and solar power plants in Djibouti and Egypt and the development of energy storage systems in Cape Verde, according to the the statement.
The AFC will use this capital to raise loans on the financial markets, thereby strengthening the initiative’s reach.
The investments are also expected to help create over 1,600 full-time equivalent jobs by 2031, while providing clean, reliable energy to millions of African households.
These projects will also foster regional integration and expand economic opportunities for marginalised populations, especially women and rural communities.
Responding to climate, infrastructure challenges
Although Africa contributes less than 3 per cent of global carbon emissions, the continent bears the brunt of the consequences of climate change. At the same time, an annual infrastructure financing deficit estimated at $170 billion is a major obstacle to sustainable development.
The AfDB’s investment aims to fill these gaps by creating a sustainable financial ecosystem capable of catalysing economic opportunities and strengthening climate resilience.
“The AfDB’s investment in AFC’s green equity is expected to attract other regional and global investors, amplifying the impact of this initiative and demonstrating that Africa is ready to lead the way in green growth,” said Solomon Quaynor, AfDB Vice President for Private Sector, Infrastructure and Industrialisation.
According to the AFC Board Member, Banji Fehintola, the AfDB’s $30 million commitment underscores the critical role of sustainable finance in addressing Africa’s climate and infrastructure challenges, while supporting our shared mission of a prosperous and sustainable Africa.
Ahmed Attout, AfDB’s Director of Financial Sector Development, added that the partnership was an important step in channelling national, regional and global capital into climate and sustainable growth projects.
ARD/te/lb/gik/APA