Page 11 - AfrElec Week 20 2021

AfrElec INVESTMENT AfrElec

AfDB and EBRD partner on sustainable

private sector funding in Africa

AFRICA THE African Development Bank (AfDB) and towards reaching the UN Sustainable Devel-
the European Bank for Reconstruction and opment Goals through its negative impacts on
Development (EBRD) have signed a new part- businesses and economies, partnerships between
nership to ensure increased participation of the financing institutions, especially large banks, are
private sector in financing and implementation vital to speed up recovery.
of sustainable projects. In early May, South African bank Absa signed
The EBRD and AfDB are partnering to a deal to receive the continent’s first certified
encourage, source and provide new funding to green loan, in the form of a $150mn loan from
help bridge the $2.5 trillion annual financing gap the International Finance Corporation (IFC).
for development in Africa. Jason Quinn, Absa interim group chief exec-
They already together issued a $114mn pack- utive, said: “Africa’s green transition requires
age for the development of Egypt’s largest solar considerable mobilisation of funds. The agree-
project in April 2021. ment with IFC bolsters our funding available for
The EBRD and AfDB will leverage their green projects and strengthens Absa’s position as
experience in global and regional financing a leader in financing renewable projects in South
to increase private sector financing in climate Africa.”
change mitigation, green and resilient infra- The loans will be directed towards the fund-
structure, and capital markets developments. ing of renewable energy projects and other car-
Akinwumi A. Adesina, President of the bon emissions reduction initiatives.
AfDB, said: “The new partnership agreement The participation of the private sector in
between our two institutions will pave the way infrastructure development projects in develop-
for us to do more together, especially in sup- ing countries saw a huge decline in the first half
porting the growth of Africa’s private sector. The of 2020 as a result of the pandemic, according
impact of [coronavirus] COVID-19 on govern- to a World Bank report. The report found a 52%
ment resources is huge and we need to mobilise decline in private participation in infrastructure
more private resources to help African countries in developing countries, with almost $45.7bn in
build back stronger.” investments being directed towards some 252
With COVID-19 disrupting Africa’s progress projects. ™

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