Africa: African Development Bank to Make $30 Million Equity Investment in Africa Finance Corporation to Catalyse Climate Action
The African Development Bank’s Board of Directors has approved a $30 million equity investment in Africa Finance Corporation (AFC) for the rollout of innovative “green shares” aimed at mobilising resources for climate action projects across Africa.
The innovative financial instruments are expected to unlock significant funding for high-impact projects, including wind and solar power plants in Djibouti and Egypt and energy storage systems in Cabo Verde. AFC will leverage the green equity and mobilise debt funding from capital markets for on-lending to sub-projects. The board approval took place on 11 December 2024.
Despite contributing less than 3% of global carbon emissions, Africa faces severe climate impacts and an annual infrastructure financing gap of $170 billion. The African Development Bank’s investment positions AFC to play a key role in establishing an ecosystem of sustainable financing that will bridge these gaps to create economic opportunities and enhance Africa’s climate resilience.
Solomon Quaynor, African Development Bank Vice President for Private Sector, Infrastructure and Industrialisation said, “the collaboration between the African Development Bank and Africa Finance Corporation exemplifies the transformative power of strategic partnerships. The Bank Group’s first-mover investment in AFC’s green shares is expected to attract other regional and global investors, amplifying the impact of this initiative, and sending a strong signal to global investors that Africa is ready to lead the way in green growth.”
“We are honoured to welcome the African Development Bank, Africa’s largest development finance institution, as the first investor in our Green Shares program,” said Banji Fehintola, Executive Board Member and Head of Financial Services at AFC. “Their $30 million commitment highlights the critical role of sustainable financing in tackling Africa’s climate and infrastructure challenges, while strengthening our shared mission to drive transformative change across the continent. By working with a like-minded partner who shares our vision for a prosperous and sustainable Africa, we are advancing impactful solutions that support the continent’s green transition and long-term development,” he added.
Ahmed Attout, the Bank’s Director for Financial Sector Development, stressed that, “This partnership with AFC is a major milestone in our efforts to channel domestic, regional, and global capital into projects that build climate resilience and foster sustainable growth.”
The investment is projected to contribute to the creation of over 1,600 full-time equivalent jobs by 2031, while also fostering regional integration, and generating clean, reliable energy to power millions of African households. It is also expected to drive inclusive growth and expand economic opportunities for marginalised populations, including women and rural communities.
About Africa Finance Corporation
Africa Finance Corporation was established in 2007 to be the catalyst for pragmatic infrastructure and industrial investments across Africa. AFC’s approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development, and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth.
Seventeen years on, AFC has developed a track record as the partner of choice in Africa for investing and delivering on instrumental, high-quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications. AFC has 43 member countries and has invested US$13 billion across Africa since inception.