MARRAKECH, Morocco (PAMACC News) - The World Bank and Ithmar Capital have announced the creation of the Green Growth Infrastructure Facility, the first green fund dedicated to Africa.
The World Bank Group and Ithmar Capital, have entered into a memorandum of understanding relating to the setting up of a Green Growth Infrastructure Facility for Africa ("GGIF Africa") which primary objective is to catalyse the transition in Africa to a green economy.
The two institutions will be supporting resource efficient, low carbon, inclusive growth within the ecological limits of the planet, clean energy and improved energy access, low carbon transportation and logistics including ICT and efficient utilisation of water resources.
GGIF AFRICA's intermediate objective is to catalyse and leverage private capital flows for investment in efficient, sustainable, low carbon intensity infrastructure in Africa.
World Bank President Dr Jim Yong Kim said climate change is the most significant environmental, economic and social challenges of our time. It poses a substantive threat to the well-being and standard of living today, and for future generations. The COP 22 is mobilising stronger and more ambitious climate action by all Parties and non-Party stakeholders," Kim said.
WB's Climate Change Action Plan focus is on the total resources mobilised and catalysed not only on its own account lending, and adjust internal processes and incentives accordingly.
"Africa has become a "strategic priority for Morocco''. Relying on its growing economy and European proximity, the Kingdom is working towards becoming a competitive African hub.
Morocco is today a key economic and strategic partner for most African economies, as is evidenced by the exponential rise in direct investments in high-value added sectors such as banking, insurance, telecommunications, energy agriculture and social housing," said King Mohammed VI.
He added that as the world mobilises to fight climate change and transition to a green economy, it is clear that available public capital would fall far short of the amount needed to avoid a major rise in temperatures.
"In this context, GGIF Africa would mobilize capital from the private sector, through public-private partnerships ("PPP") structures at GGIF Africa and project's levels. Public financial contributions would be designed to maximize private investment. The main focus for the GGIF Africa would be deployment of private capital for commercially bankable PPPs, and de-risking marginally non-bankable projects to render them viable. Tools may include innovative mechanisms for project preparation and deal structuring, and strategic design of fund and project capital structures," he said.
The World Bank and Ithmar Capital intend to work in close partnership with a broad range of public and private investors, including regional development banks, global and regional institutional investors with the objective to increase private capital participation in green infrastructure investments and achieve resource efficient, low-carbon, low impact and resilient growth in Africa.
Dr Akinwumi Adesina, President of the Africa Development Bank (AfDB) said Africa's infrastructure agenda requires a regional approach as there are a large number of national economies under US$10 billion GDP (31), landlocked countries (15) and trans-boundary rivers (60 basins), and an uneven distribution of natural resources and population centers.
"There are major infrastructure access needs. For example, Africa needs 7,000 MW of new power generation capacity each year, but has been installing only 1,000 MW in recent years.
Less than five percent of agricultural land is irrigated, less than 10 per cent of hydropower potential has been tapped, and only 58 per cent of Africans have access to a clean water source," Adesina said.
