AfDB mobilizes $800 million for energy infrastructure projects in Africa
FILE – For illustration purposes only. [File photo: Energy Update]
The African Development Bank (AfDB), through the Africa50 Fund initiative to support the continent’s states, intends to inject up to $800 million into the energy infrastructure sector.
The project platform aims to mobilize capital to finance projects in digital infrastructure, energy and renewable energy, transport, logistics, water and sanitation, with a strong impact on development.
The announcement was made a few days ago by Alain Ebobissé of the Pan-African Foundation, during the Choiseul Africa Summit, held in Cotonou, Benin.
The investment includes the launch of a new investment vehicle worth $500 million, of which $400 million will be earmarked for the development of green infrastructure.
According to AGI, the creation of the new fund had already been called for last January, at a conference organized by the World Bank and the AfDB in Tanzania, which aimed to accelerate initiatives aimed at connecting 300 million Africans to electricity by 2030. The project is part of a larger initiative to mobilize African and international capital to cover the annual infrastructure financing gap in Africa, estimated at more than $100 billion by the AfDB.
The Africa50 Fund was initially endowed with a reserve of $3 billion, and over the years the fund has benefited from significant investments. In 2023, the AfDB announced the successful closing of the Africa50 Infrastructure Acceleration Fund (Africa50-IAF) with commitments of $222.5 million, a share secured thanks to the participation of 16 African institutional investors, including sovereign wealth funds, pension funds, social security funds, insurance companies, banks and development finance institutions.
In January this year, the International Financial Services Corporation (IFC) announced a $20 million investment in the Africa50 Infrastructure Acceleration Fund (IAF Fund), which will invest in projects in digital infrastructure, energy and renewable energy, transportation, logistics, water and power generation. The fund aims to invest in projects across Africa where the private sector plays an important role in supporting infrastructure development. The focus on digital infrastructure and energy sectors is increasingly aligned with the World Bank Group’s multiple initiatives and the IFC’s strategy to support projects that will have a significant development impact. To stimulate financing for the sectors most in need, Nairobi will host a high-level conference on smallholder finance on 17 and 18 March, organized by the AfDB and the Pan African Farmers’ Organization (PAFOS), to share knowledge on how to improve smallholder farmers’ access to financial resources, investment opportunities, market infrastructure, capacity building initiatives and sustainable agricultural practices.