The African Development Bank (AfDB) Board of Directors has approved a $30 million equity investment in Africa Finance Corporation (AFC) to launch innovative “green shares” aimed at mobilizing resources for climate action across the continent.
These pioneering financial instruments are expected to attract significant funding for impactful projects, including wind and solar power plants in Djibouti and Egypt, and energy storage systems in Cabo Verde.
By leveraging green equity, AFC will tap into capital markets to secure debt financing for sub-projects. The board’s approval came on December 11, 2024.
Africa, despite contributing less than 3% of global carbon emissions, suffers disproportionately from climate change while facing an annual infrastructure financing gap of $170 billion.
This investment by AfDB positions AFC to spearhead a sustainable financing ecosystem to address these challenges, create economic opportunities, and enhance the continent’s climate resilience.
Solomon Quaynor, AfDB Vice President for Private Sector, Infrastructure, and Industrialization, highlighted the significance of the partnership, stating, “The collaboration between the African Development Bank and Africa Finance Corporation exemplifies the transformative power of strategic partnerships. Our first-mover investment in AFC’s green shares will encourage other regional and global investors, amplifying the initiative’s impact and signaling Africa’s readiness to lead in green growth.”
Banji Fehintola, Executive Board Member and Head of Financial Services at AFC, expressed gratitude for AfDB’s support, saying, “We are honored to welcome the African Development Bank as the first investor in our Green Shares program.
This $30 million commitment underscores the importance of sustainable financing in addressing Africa’s climate and infrastructure challenges. By partnering with a like-minded institution, we are advancing solutions that drive the continent’s green transition and long-term development.”
This initiative aims to showcase Africa’s potential as a leader in climate-focused investments while bridging critical infrastructure gaps.