On Thursday, the European Investment Bank (EIB) reaffirmed its commitment to invest $52.48 million in Africa Finance Corporation’s (AFC) $750 million Infrastructure Climate Resilient Fund (ICRF).
This landmark project, managed by AFC Capital Partners (ACP), the asset management division of AFC, aims to accelerate climate adaptation and sustainable infrastructure development across Africa.
The Green Climate Fund (GCF) has already committed $253 million to ACP, making it the GCF’s largest equity investment in Africa to date. The Fund has also received commitments from two private African pension funds and the Nigeria Sovereign Investment Authority (NSIA), indicating strong institutional support both domestically and abroad.
By incorporating resilience measures into all phases of infrastructure development, from design and building to operation, the Infrastructure Climate Resilient Fund seeks to expedite climate adaptation across Africa.
In addition to using blended financing to reduce the risk of private investment, the Fund incorporates innovative instruments like climate risk parametric insurance to improve protection against losses and hazards associated with climate change.
Aligned with the UN Sustainable Development Goals and the European Union’s Global Gateway program, the Fund will also provide technical assistance to strengthen the capacity of nations looking to analyse and adapt to climate risk.
The close cooperation between the EIB, AFC, and other key partners was demonstrated on Thursday when the EIB formally signed the agreement at the Finance in Common Summit (FICS) in Cape Town.
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“The EIB is committed to supporting private sector investment in climate-resilient infrastructure, especially in regions most vulnerable to climate change,” EIB Vice-President Ambroise Fayolle stated at the ceremony on Thursday.
He continued, “This partnership with the Africa Finance Corporation and the launch of ACP’s Infrastructure Climate Resilient Fund are a significant step towards accelerating Africa’s green and digital transition and ensuring a sustainable future for all. The EIB’s investment is not just about the initial capital injection; it is also intended to have a multiplier effect by attracting more investors, reducing risk, showcasing successful projects, and promoting best practices in climate finance.”
What the AFC’s $750 million Infrastructure Climate Resilient Fund intends to achieve
By tackling market failures, reducing environmental risks, bolstering trade, logistics, and industrialisation, and quickening the continent’s digital and energy transition, ACP’s fund seeks to show that Africa can pursue a path towards sustainable and climate-resilient growth.
“This Fund is crucial for bridging the funding gap for climate adaptation in Africa,” Samaila Zubairu, AFC’s President & CEO, said at the launch event.
He adds, “By focusing on climate-resilient infrastructure, we are not only securing our economic future but also creating opportunities for sustainable growth and supporting job creation across the continent. We are glad to partner with the EIB and other investors who are committed to increasing the impact of climate finance.”
ICRF to mitigate the impact of climate change in Africa
By making investments in climate-resilient infrastructure and lowering carbon emissions, the ICRF targets Africa, the continent most susceptible to climate change.
In order to promote sustainable growth, the Fund gives priority to robust, low-carbon solutions in the areas of renewable energy, digital infrastructure, industrial development, and transportation and logistics.
The investment strategy of ACP assesses climate risk in terms of transition and physical aspects, such as emissions and climate governance.
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In order to withstand and adjust to changing climate conditions, the Fund is dedicated to making sure that infrastructure assets are planned, constructed, and maintained.
ACP will accomplish this by carrying out thorough evaluations and screenings of climate risk for each investment, setting a new standard for choosing and putting into practice the best adaptation measures.
Fund to leverage EIB, AFC and GCF partnership to enhance climate resilience
The Fund makes use of a strong collaboration between three significant organizations—the EIB, AFC, and GCF—that brings together their knowledge, resources, and dedication to climate resilience.
In line with the EIB’s Climate Bank Roadmap, ACP will leverage the extensive technical know-how and track records of both the EIB and AFC in infrastructure investment to provide a strong platform that will pull in more investors.
This collaborative partnership will enable the $750 million fund to unleash up to $3.7 billion in funding, which will accelerate the implementation of climate-resilient infrastructure throughout Africa.
In addition to covering the first-loss tranches on new investments, the GCF will play a crucial role in de-risking projects and attracting private participation by offering professional assistance for due diligence and climate resilience monitoring. After it is up and running, the Fund wants to invest in 10 to 12 diverse initiatives throughout Africa.
Moreover, it will help nations and organisations develop their competence and implement climate risk assessment and adaptation strategies.
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