AfDB Mobilizes Business Sector In Support Of $20 Billion Green Growth Projects
African Development Bank Mobilizes Business Sector In Support Of $20 Billion.
Yesterday, the African Development Bank (AfDB) urged the private sector and various governments to take advantage of opportunities in green growth infrastructure for sustainable development in Nigeria and other African nations.
The bank stated at the ongoing 2023 annual general meeting in Sharm el Sheikh, Egypt, that while many African countries’ prospects are dim under the circumstances, there are excellent potential to change course thanks to a wealth of green resources.
The stakeholders agreed that the continent must shed its colonial mentality of serving simply as a source of raw materials for international corporations and instead transform into an industrialized continent powered by renewable energy.
Dr. Akinwumi Adesina, president of the AfDB Group, stated that in order to fully realize the huge potential of green growth, public sector investment must be accompanied by the mobilization of private sector resources.
According to Adesina, the continent needs to invest more in green infrastructure, including finance from the private sector for renewable energy, green urban infrastructure, green hydrogen, and infrastructure for climate resilience.
Alliance for Green Infrastructure in Africa (AGIA) seeks to raise $500 million in project development and repair finance through private equity platforms, as well as $10 billion in private sector funding for green infrastructure in Africa.
“But as the world transitions to electric cars, Africa stands to be able to attract billions of dollars in private investments for green global transport systems. Africa has 80 per cent of global deposits of platinum, 50 per cent of global deposits of cobalt, 40 per cent of nickel, and substantial deposits of lithium.”
“Africa must not make the same mistake of the past. Africa must set itself up to manufacture lithium-ion batteries to tap into the future market that has been estimated to be worth trillions of dollars. The cost of establishing a lithium-ion factory in Africa is three times less expensive than in China and the United States,” Adesina said.
Adesina continued by saying that the AfDB had established the Alliance for Green Infrastructure in Africa (AGIA) and the African Financial Alliance on Climate, which brought together all financial institutions to create a more environmentally friendly financial ecosystem.
He said that in addition to directing investment portfolios toward green infrastructure, the usage of green bonds may also mobilize international green financing for African nations since the continent now represents for 0.2% of the $2.2 trillion in total green bonds expected to be issued up to 2022.
He added that over the previous ten years, the AfDB has granted bonds totaling up to $10 billion for social and environmental projects, including those involving energy, water treatment facilities, and insurance against climate risk in Cabo Verde, Madagascar, and Egypt.
Vice President of Tanzania, Dr. Phillip Mpango, observed that as the old world order that kept Africa as the developed nations’ raw material bank has altered, so too should Africa’s response to industrialization.
According to Mpango, modern-day Africa has a greater population and more requirements, which should call for a thorough assessment of international financial and economic policies that benefit Africa.
In a similar move, on the sidelines of the 2023 Annual Meetings of the African move Bank Group, the Africa Investment Forum presented four renewable energy and sustainability projects valued close to $1.5 billion to investors at the conference.
The pipeline of the Africa Investment Forum is where the curated projects, which come from all of Africa’s regions, are found.
They show the growing need for accelerating climate action in Africa, the continent most susceptible to climate change, including bridging funding shortages by securing an ever-increasing portion of global capital for the continent. Green projects highlight the continent’s many prospects, from hydropower to plastic recycling.
The transactions included a hybrid hydrogen feedstock/ammonia plant in North Africa that will use 400 MW of renewable energy to produce 183 tons of hydrogen feedstock per day without emitting CO2, which will then be electrolyzed to produce 1,000 tons of green ammonia per day. The project needs an additional $27 million in funding to become bankable.
The second deal is a 27 MW hydropower project in West Africa that has passed feasibility tests.
Numerous international organizations and multilateral development organizations have also pledged financial support for it.
The agreement is expected to provide services to 700,000 families, create 600 direct and indirect jobs over the course of the project, and cut CO2 emissions by 81,000 tons annually, among other advantages. The project will enhance the nation’s overall capacity for generating electricity by 10%.