The Board of Directors of the African Development Bank Group (AfDB) has approved the proposal to take an initial stake of up to $10 million in the “Alliance for Green Infrastructure in Africa – Project Development” (AGIA-PD)” Fund as part of its investment supports for successful green transition of African countries.
A news report from African Press Organization (APO) Group distributed for the development finance institution indicates that part of the Alliance for Green Infrastructure in Africa (AGIA), a $10 billion initiative led by the Bank and formed jointly with the African Union Commission (AUC), the pan-African investment platform Africa50 and several other partners, the AGIA-PD seeks to help accelerate the continent’s green transition by collaborating with African countries and the organized private sector (OPS), to prepare and develop resilient, transformative green infrastructure projects and programmes quickly and at scale.
By its design, the AGIA will be implemented through three pillars: first, project preparation seeking to raise $100 million in donations upstream for targeted activities; second, project development, using the AGIA-PD mechanism, to raise $400 million in blended capital to transform green infrastructure project concepts into bankable opportunities, and third, investment and finance that involves establishing a framework to facilitate the mobilization of $10 billion in funding — from treasury stocks, loans and risk mitigation instruments — to provide large-scale funding for green infrastructure projects prepared and developed under pillars one and two.
The news report also showed that the AGIA-PD fund would run for 15 years and should reach its capitalization target in three years as its blended capital structure combines donations and first- and second-rank treasury stocks for a total of $400 million.
The report recalled that in December 2023, at COP 28 in Dubai, some $175 million in commitments were announced, which included a potential contribution of USD 40 million from the African Development Bank and a commercial investment of $10 million approved by the Bank’s Board of Directors for a current total of around USD 215 million.
“The AGIA-PD targets investors including multilateral development banks, impact funds, governmental organizations, sovereign funds, regional and non-regional institutional investors, commercial investors and philanthropists.
Commenting on the bank’s role in the funding, the AfDB’s Vice President for the Private Sector, Infrastructure and Industrialization, Solomon Quaynor, explained: “The AGIA-PD is a strategic investment, co-managed by the Bank, to transform concepts into bankable green infrastructure projects quickly and at scale.
“It will invest in the development of green infrastructure projects to produce a financial yield and to have an impact on development. It will seek support from the private sector to develop transformative, green, resilient projects that will fill Africa’s infrastructure gap for the long term”, Quaynor added.
Similarly, the special envoy to the AfDB’s President, Amadou Hott, said: “The AGIA’s vision is to speed up the deployment of transformative green infrastructure projects by creating a robust partnership between the different actors and targeting the entire green infrastructure project preparation, development and funding ecosystem, working with both emerging and established actors.
“The ultimate objective is to accelerate the continent’s green transition, while drastically reducing the shortage of infrastructure”, Hott added.
The AGIA-PD target sectors and investments in climate change mitigation projects are aligned with the beneficiary countries’ nationally determined contributions and with the Bank’s High 5 strategic priorities, namely ‘Light Up and Power Africa’, ‘Feed Africa’, ‘Industrialize Africa’, ‘Integrate Africa’ and ‘Improve the Quality of Life for the People of Africa’ as well as the Bank’s Climate Change and Green Growth Strategic Framework 2021-2030.
