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Sunday, December 10, 2023

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Africa50 in talks with IsDB for green infrastructure partnership

Infrastructure investment platform Africa50 is in preliminary discussions with the IsDB on funding opportunities under its Alliance for Green Infrastructure in Africa (AGIA) initiative, ISFI has learned.

The AGIA was launched in late 2022 on the sidelines of the 27th United Nations Climate Change Conference, known as COP27, in an effort to help scale and accelerate financing for green infrastructure projects in Africa.

With a number of global partners including the African Development Bank (AfDB), which the IsDB has collaborated with on multiple occasions, the AGIA targets to raise up to US$500 million in funding to provide early-stage project development capital, which is projected to generate up to US$10 billion in green infrastructure investments.

While the details of the partnership currently being explored are yet to be confirmed, the alliance focuses on generating a pipeline of transformational bankable projects and catalyzing financing at scale and speed for Africa’s infrastructure.

Separately, Africa50 recently secured a number of partnerships including an agreement with Abu Dhabi Future Energy Company (Masdar) signed earlier this month. Under the agreement, Masdar has committed to mobilize US$10 billion in clean energy finance, US$8 billion of which will be funded through project finance, with the remainder generated from equity. The investment targets to deliver 10 gigawatts of clean energy capacity in Africa by 2030.

The AfDB launched Africa50 in 2013 following the Declaration on the Programme for Infrastructure Development in Africa the previous year where heads of states called for the accelerated delivery of infrastructure as part of the African Union’s Agenda 2063.

Africa50, which focuses on medium- to large-scale infrastructure projects with significant development impact while offering an appropriate return to investors, seeks to provide support throughout the project cycle, including through providing financing guarantees.

Notably, Africa50’s project financing focuses on a private equity model, providing primarily equity and quasi-equity while accessing preferential debt from development finance institutions such as the AfDB. It generally takes a minority stake in its projects, acting alongside the main sponsors and partners in the projects.

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