Grace Ashiru
The African Development Bank’s Board of Directors has approved a $30 million equity investment in the Africa Finance Corporation (AFC) to support climate action projects across the African continent. According to a statement from the parties involved, the funds will be directed toward the development of solar power plants, energy storage systems, and other green initiatives.
This equity investment is tied to the rollout of AFC’s groundbreaking “green shares” program. Through this initiative, innovative financial instruments will help unlock substantial funding for impactful projects such as wind and solar power plants in Djibouti and Egypt, as well as energy storage systems in Cabo Verde.
AFC plans to leverage this green equity investment to mobilize debt funding from capital markets, which will then be used to finance sub-projects. By 2031, this investment is expected to create over 1,600 full-time equivalent jobs, while fostering regional integration and providing clean, dependable energy to millions of African households.
Additionally, the initiative aims to promote inclusive growth and broaden economic opportunities, particularly for marginalized groups, including women and rural communities.
Africa, despite contributing less than three percent of global carbon emissions, faces severe climate challenges alongside an annual infrastructure financing gap of $170 billion. To address these issues, the African Development Bank’s (AfDB) recent investment positions the Africa Finance Corporation (AFC) as a key player in creating a sustainable financing ecosystem to bridge these gaps, foster economic opportunities, and enhance climate resilience across the continent.
Solomon Quaynor, African Development Bank Vice President for Private Sector, Infrastructure, and Industrialisation, highlighted the significance of this collaboration, stating, “The partnership between the African Development Bank and Africa Finance Corporation exemplifies the transformative power of strategic alliances. 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.”
Banji Fehintola, Executive Board Member and Head of Financial Services at AFC, echoed this sentiment, stating, “We are honoured to welcome the African Development Bank, Africa’s largest development finance institution, as the first investor in our Green Shares programme. Their $30 million commitment underscores the importance of sustainable financing in addressing Africa’s climate and infrastructure challenges while reinforcing our shared mission to drive transformative change across the continent. By collaborating with a like-minded partner who shares our vision for a prosperous and sustainable Africa, we are advancing impactful solutions to support the continent’s green transition and long-term development.”
Ahmed Attout, AfDB’s Director for Financial Sector Development, emphasized the broader implications of this partnership, noting, “This collaboration with AFC marks a significant milestone in our efforts to channel domestic, regional, and global capital into projects that build climate resilience and promote sustainable growth.”
