Hubert Danso, CEO and chairman of Africa investor (Ai), is calling on long-term investors to harness opportunities offered by institutional investor public partnerships (IIPPs).
By harnessing the African Union’s Nairobi Declaration (Africa’s Green Investment Deal), the African Green Infrastructure Investment Bank (AfGIIB), the African Continental Free Trade Area (AfCFTA), the Africa Green Industrialization Initiative (AGII) launched at GOP28 and a $3 trillion pipeline of NDC investment opportunities, Danso said long-term investment partners can seize this pivotal moment where financial prosperity converges with environmental responsibility and dedicate strategic investment allocations to African green industrial infrastructure.
As long-term universal owners, he believes asset owners can catalyze mandate-aligned, sustainable economic growth, propel technological innovation and combat climate change on a global scale — all while optimizing market appropriate returns on a climate and risk-adjusted basis.
African green industrial infrastructure assets, along with the $3 trillion platform of NDC project investment opportunities, are poised to capture a significant share of the $10 trillion per year and growing global green offtake market, according to Ai. With escalating demand for industrial green technologies and electric vehicle batteries, Africa emerges as a central player in sustainably meeting this demand, leveraging its abundant renewable energy resources.
In addition, Africa’s vast renewable-energy resources serve as the cornerstone for decarbonizing mining and manufacturing processes, driving advancements in artificial intelligence and sustainable food systems. Harnessing these resources propels Africa to the forefront of green technology production, offering unparalleled environmental benefits while revolutionizing traditional manufacturing paradigms.
From both a return on investment and risk-adjusted return perspective, African green industrial infrastructure presents an enticing proposition, according to Danso. Abundant resources, favorable regulatory environments and strategic partnerships guarantee competitive returns with carefully managed risk exposure.
Danso highlighted that investing in African green industrial infrastructure transcends mere investment as usual; rather, it embodies a strategic imperative for domestic and global universal owners dedicated to advancing global sustainability. To read more about Danso’s call to action, click here.
In related news, Ai recently issued a memo, titled More Smoke & Mirrors: The Calculated Mirage of Adequate MDB Private Capital Mobilization for Africa’s Climate & SDG Investment Goals, to coincide with the spring meetings of the International Monetary Fund and the World Bank Group in Washington, D.C.
The memo serves as a cautionary note to African heads of state that despite the World Bank’s recent “self-congratulatory progress updates on the implementation of the long-overdue multilateral development banks’ (MDBs) reform agenda, they continue to preside over an epic private capital mobilization (PCM) market failure, with inadequate PCM key performance indicators and no answer to mobilizing the desperately needed trillions to industrialize and transform Africa’s abundant natural and human capital.”
The memo states MDBs are notoriously criticized for competing with and crowding out, rather than crowding in the domestic and global institutional investment community. As a $1.5 trillion collective global balance sheet (including the World Bank, AfDB, etc.), MDBs PCM reforms are falling short, with the potential to close only a mere 10 percent of Africa’s financing gap between now and 2030 and 2050, even after the implementation of current significant MDB PCM reforms.
This contrasts sharply with the global institutional investment community, according to Ai, representing more than $200 trillion of assets — which is capable of closing up to 90 percent of Africa’s financing gap through IIPPs.
To read the full memo, click here.
