The African Development Bank (AfDB) is embarking on a ground-breaking initiative by introducing green finance facilities in two public financial institutions in Benin and Côte d’Ivoire. This initiative, known as the African Green Bank (AGB), aims to promote resilient, green and sustainable growth while supporting the implementation of African countries’ Nationally Determined Contributions (NDCs). The AfDB strives to address African countries’ significant challenges in financing their climate transition by facilitating access to global finance and mobilising private sector investments.
The AGB Initiative was launched to bridge the gap between African countries’ climate investment needs and available funding. According to estimates, the investment requirements resulting from NDCs in Africa will amount to USD 2.8 trillion by 2030. However, the current funds invested in green finance on the continent represent a limited share of the global flows, with private sector contributions remaining restricted. The initiative aims to increase the percentage of international finance invested in Africa from 3 percent to 10 percent annually by 2030.
USD 1.6 million has already been secured to kickstart the AGB facilities. The AGB Initiative aims to reduce financing costs, mobilise private sector investments, and attract new sources of catalytic funds for climate action in Africa.
By strengthening the capacity of local financial institutions, the initiative will facilitate the development of a robust pipeline of bankable green projects. This approach will help derisk investments and instill confidence among investors in climate-resilient and low-carbon initiatives.
The AfDB envisions the African Green Bank facilities as a significant step toward achieving sustainable and inclusive growth in Africa while addressing the pressing challenges of climate change.
