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World Bank‑IMF Spring Meetings: Investors Call for Priority Investor Status to De‑risk & Scale Allocations to African NDCs

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African NDC‑Aligned Green Industrial Infrastructure as a Globally Competitive Investable Asset Class

Executive Summary

During the World Bank-IMF Spring Meetings, investors advocated for the creation of Priority Investor Status (PIS), a proven framework designed to de‑risk and scale the mobilization of institutional capital for Africa’s NDC‑aligned green industrial infrastructure and SDG‑aligned investments. PIS would provide institutional investors with essential protections, transparency, and prioritization—unlocking allocations from over $300 trillion in global private assets. By contrast, the collective balance sheet of Multilateral Development Banks (MDBs) stands at just $2 trillion. A mere 1% reallocation from global private capital could dwarf MDB capacity by more than 1 500%, enabling a transformative, programmatic scaling of Africa’s sustainable investment pipeline.

MDB Preferred Creditor Status – Lessons and Limits

MDBs have historically enjoyed Preferred Creditor Status (PCS), a key factor in their ability to de‑risk investments and achieve exceptionally low default and high recovery rates. According to Fitch Ratings and Moody’s Ratings, PCS has delivered an average 94.9% recovery rate and an average 1.06% default rate over 40 years of sovereign‑backed lending. This demonstrates PCS’s power to boost investor confidence in challenging environments.

However, PCS is exclusive to MDBs and cannot be extended to the broader pool of private institutional capital. The $2 trillion collective balance sheet of MDBs is vastly insufficient for Africa’s scale of infrastructure and climate needs.

In contrast, the global private institutional capital pool exceeds $300 trillion. Allocating even 1% of this pool to African green industrial infrastructure and SDG projects would generate $3 trillion—over 1 500% of MDB capacity. Yet, this capital remains largely untapped due to perceived political, governance, and enforcement risks.

The Case for Priority Investor Status (PIS)

PIS builds on the de‑risking precedent of PCS but retools it for private investors. By embedding legal protections, policy prioritization, and transparency into sovereign‑backed projects, PIS creates a new tier of protected capital:

  1. Legal Frameworks: National investment laws codify PIS protections.
  2. Institutional Investor‑Public Partnerships (IIPPs): Align public goals with private capital mandates.
  3. International Model Legislation: Ensures enforceability and cross‑border consistency.

PIS unlocks Africa’s green industrial potential by:

  • Offering private capital clear legal protections
  • Providing end‑to‑end transparency
  • Ensuring enforceability of government commitments, reducing perceived risk and enhancing liquidity

Why Africa, Why Now

Africa is the final frontier for the global green industrial economy—boasting super‑abundant renewables, natural capital, and rising industrial demand. Yet political, governance, and enforcement uncertainties deter risk‑averse institutional investors, leaving private capital on the sidelines.

By embedding PIS into priority NDC‑backed infrastructure projects, African governments can de‑risk these projects, unlocking trillions in private capital via IIPPs, and positioning the continent for global competitiveness.

How PIS Transforms Barriers into Scalable Investment

PIS enables these investments to be packaged, rated, and scaled like mainstream global assets by:

  • Lowering perceived risk through formal protections and prioritization mechanisms
  • Enabling large institutional investors to meet fiduciary mandates
  • Creating investable indices and ETFs from aggregated, de‑risked assets
  • Triggering large, programmatic allocations—not isolated pilot projects
Investor Barrier PIS Response Impact
Policy unpredictability Binding government commitments to prioritize climate‑aligned investments in budgets and repayment cycles Reduces sovereign policy risk
Legal insecurity Codified legal privileges (priority in debt workouts, enforceable contract terms) Enhances legal certainty
Default risk perception Structured de‑risking via blended finance, guarantees, and co‑investment from MDBs/sovereign platforms Narrows the risk premium
Data opacity Mandated disclosure, performance tracking, and alignment with AI‑driven platforms like GEMs3.0 Builds transparency and investability
Limited exit options Regulatory incentives for listed sustainability‑linked securities and tokenized portfolios Increases liquidity and tradability

From Theory to Practice – Implementation Strategy

  1. Legal Reform
    Develop and implement a Priority Investor Status Model Law, codifying investor prioritization, transparency, and enforceability across African nations.
  2. Regulatory Enablement
    Align national development planning and infrastructure procurement pipelines with PIS‑backed IIPPs to signal stability and build investor confidence.
  3. Platform Integration
    Integrate PIS contracts and risk analytics into the GEMs3.0 AI Investment Risk Platform for dynamic monitoring, real‑time pricing, and capital mobilization at scale.
  4. Pilot Portfolios
    Launch $5 Bn+ reference portfolios of climate‑aligned African infrastructure assets, structured with PIS protections, indexed via GEMs3.0 to demonstrate scale and performance.
  5. Institutional Investor Engagement
    Secure mandates from asset owners and managers to allocate capital to PIS‑backed investments, supported by sovereign guarantees, legal assurances, and transparency tools.

Conclusion

Africa’s green industrial infrastructure is one of the world’s most attractive yet undercapitalized opportunities. Without a robust de‑risking framework, private capital will remain on the sidelines. With $300 trillion in institutional assets vs. $2 trillion in MDB capacity, Priority Investor Status transcends policy innovation—it is an economic imperative to scale investments, deliver risk‑adjusted returns, and meet global climate, nature, and development goals.

References

The Missing Link in Africa’s Trade Success

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Why Innovative Financing Matters Now More Than Ever

Africa faces a persistent $120 billion-plus trade finance gap that limits its ability to move beyond raw material exports and into value-added production and industrialization. At the recent Africa Business Forum 2025 hosted by the United Nations Economic Commission for Africa (UNECA), stakeholders from key industries, including financial institutions, multilateral organizations, and private sector entities, emphasized the urgent need to strengthen regional value chains through a multisectoral approach and the need for African financial institutions to help realize this objective. With increasing global economic pressures – including rising interest rates and de-risking steps by international financial institutions – African businesses are struggling to access the capital needed to scale production, integrate into regional and global value chains, and expand exports. Without sufficient trade finance, Africa risks missing a crucial window to industrialize, create jobs, and build resilient economies that are less dependent on commodity price fluctuations.

Yeabsira Zewdie, Director and Head of Development Finance Services at MiDA Advisors
 “We need stronger partnerships, innovative financing solutions, and a renewed commitment to turn Africa’s raw potential into refined power.” Yeabsira Zewdie

Unlocking Africa’s trade finance potential requires greater engagement from development financial institutions and private investors who recognize the continent’s industrial and export opportunities. Institutional investors have a crucial role to play in bridging Africa’s trade finance gap by providing longer-term capital to businesses driving additional value and regional trade. Concurrently, development financial institution through blended finance solutions, risk-sharing mechanisms, and targeted investment funds, can help de-risk trade finance in Africa, enabling local businesses to expand production and access international markets. Strengthening partnerships between African financial institutions and international investors is key to ensuring that the continent can move from raw material exports to competitive, value-added goods that drive sustainable economic growth.

Trade finance is not just about facilitating transactions – it is essential for structuring long-term capital that enables African industries to process raw materials locally, manufacture competitive goods, and increase exports. Traditional financing models in Africa have proven insufficient, thus highlighting the need for innovative solutions that can address liquidity constraints and investment risks.

Africa’s leading development financial institutions have been at the forefront of developing trade-focused investment platforms to address this challenge. For example, Afreximbank has played a pivotal role in unlocking capital for African businesses through a suite of trade finance solutions, including structured trade finance, risk-sharing instruments, and targeted investment vehicles.

Beyond Afreximbank, other African multilateral financial institutions are also addressing trade finance gaps: The African Development Bank (AfDB) supports trade finance through its Trade Finance Program (TFP), providing guarantees and liquidity to African financial institutions. The Africa Finance Corporation (AFC) is mobilizing capital to finance trade-enabling infrastructure, such as ports, logistics, and energy. The Trade and Development Bank (TDB) has expanded trade finance support for small and medium enterprises (SMEs) and emerging corporates, particularly in high-growth industries like manufacturing and agribusiness. Furthermore, these institutions are increasingly tapping into the capital markets and crowding in local institutional investors to augment their financing capacity and expand their offerings.

By scaling these innovative financing mechanisms, Africa can overcome trade finance barriers, strengthen regional value chains, and drive industrial transformation—paving the way for a competitive and resilient export market.

Closing Africa’s $120 billion trade finance gap is not just an economic necessity but a strategic imperative for scaling industrialization, strengthening regional value chains, and expanding export markets. With 90% of Africa’s exports still dominated by raw materials, the continent must accelerate access to innovative financing mechanisms that enable businesses to add value, compete globally, and create sustainable jobs. Institutions like Afreximbank, AfDB, AFC, and TDB have already mobilized billions of dollars in trade-related financing, but greater collaboration with global investors is required to meet Africa’s growing capital needs.

Strengthening risk-sharing mechanisms, increasing blended finance solutions, and leveraging digital trade platforms will be critical in de-risking investments and ensuring African businesses can access the capital they need. By addressing these financing barriers, Africa can transition from being a supplier of raw materials to a leading producer of high-value goods, unlocking a new era of economic transformation and self-sufficiency.

Dr Hubert Danso Co Chair of King Charles’s Sustainable Markets Initiative (SMI) Africa Council, speaks to BBC Newsday on Investment Climate Statesmanship

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How Institutional Investor-Public Partnerships Can Drive GreenTech Innovation Beyond Moore’s Law

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Dr. Hubert Danso, Chairman, Africa investor (Ai) Group

Every year of delayed green technology deployment costs the world an estimated $1.6 trillion in climate damages and lost opportunities—a stark reminder of the urgency to act.

The challenge of achieving net-zero targets amidst systemic climate finance gaps is one of the defining crises of our time. Green technologies hold the key to unlocking sustainable solutions. Yet, unlike digital technologies, which have adhered to Moore’s Law—doubling in performance per dollar approximately every two years—green technologies remain constrained by systemic barriers, including entrenched fossil fuel interests, fragmented markets, and regulatory inertia.

But what if we could go beyond simply aligning with sustainability goals? What if we could accelerate cost reductions in green technologies to ease inflationary pressures on consumers and industries worldwide? By integrating Institutional Investor-Public Partnerships (IIPPs), we unlock a scalable framework not just to achieve sustainability targets but also to actively reduce global inflationary pressures by slashing energy and industrial input costs.

This essay presents a groundbreaking thesis: IIPPs can accelerate, de-risk, and aggregate green investments to achieve exponential advancements in cost reductions and performance enhancements, redefining the trajectory of global green industrialization while addressing one of the world’s most pervasive economic challenges—inflation.

Sustainability Meets Cost Reduction: A Dual Mandate
Green technologies are pivotal not just for decarbonization but also for improving economic resilience. In a world grappling with persistent inflationary pressures driven by energy and resource costs, deploying scalable green technologies at reduced costs can function as a critical deflationary lever.
    • Energy as a Deflationary Tool: Renewable energy and storage technologies have already demonstrated their ability to stabilize electricity prices and shield economies from volatile fossil fuel markets.
    • Green Supply Chains: Industrial processes like hydrogen production, green steel manufacturing, and battery innovations are poised to replace costlier carbon-intensive alternatives, reducing input costs across global supply chains.
By systematically targeting cost reduction as a primary metric, IIPPs can serve a dual purpose: achieving environmental sustainability while driving widespread affordability, thereby addressing consumer-level inflation and industrial cost burdens.

 

Working Case: The African Green Hydrogen Corridor – Powering Global Industry While Reducing Inflationary Pressures
The African Green Hydrogen Corridor (AGHC) exemplifies how Institutional Investor-Public Partnerships can accelerate green innovation, drive cost reductions, and redefine industrial economics on a global scale.

 

Overview
The AGHC is a pan-African initiative that harnesses Africa’s vast renewable energy potential—solar and wind—to produce low-cost green hydrogen for global industries. By integrating modular, AI-optimized hydrogen hubs, IIPPs address critical barriers to scaling this transformative technology while unlocking economic and deflationary benefits.

 

Key Objectives of the AGHC
  1. Scaling Green Hydrogen Production: Deploy modular green hydrogen production hubs across regions like Namibia, North Africa, and Eswatini, leveraging abundant renewable energy resources.
  2. Reducing Industrial Input Costs Globally: Provide low-cost green hydrogen to energy-intensive sectors such as steel, shipping, and chemicals, reducing input costs by 15–20%.
  3. Attracting Institutional Capital through IIPPs: De-risk investments using public-backed guarantees and blended finance tools, enabling institutional investors to scale participation.
  4. Achieving Cost Parity: Drive the price of green hydrogen below $1.50/kg by 2030, making it competitive with gray hydrogen and replacing fossil-fuel dependencies.
Cost Reduction Test: Measuring AGHC Impact
Using the Consumer & Industrial Affordability Index (CIAI), the AGHC’s outcomes can be quantified across key metrics:

 

1. Industrial Input Cost Compression
  • Baseline: Green hydrogen costs $3–$6/kg, significantly higher than gray hydrogen.
  • IIPP Impact: Through AI-optimized infrastructure and investment aggregation, costs drop to $1.50/kg by 2030.
  • Result: Energy-intensive industries reduce operating costs by 15–20%, achieving price parity for green steel and fertilizers, enabling mass adoption.
2. Global Inflation Reduction
  • Baseline: Fossil fuel volatility contributes heavily to industrial inflation globally.
  • IIPP Impact: Scalable green hydrogen supply stabilizes industrial energy costs, reducing global inflation metrics driven by energy prices by 10–15% over a decade.
3. Accelerated Cost Decline (Beyond Moore’s Law)
  • Baseline: Current doubling time for green technology cost declines is 10 years.
  • IIPP Impact: IIPPs accelerate cost declines to under 5 years by integrating AI deployment, public finance guarantees, and private capital aggregation.
4. Consumer Energy Affordability
  • Baseline: High industrial energy costs cascade into higher product prices for consumers.
  • IIPP Impact: Affordable green hydrogen reduces costs for steel, shipping, and chemicals, driving down end-product prices by 5–10% globally.
Analytical Example: The AGHC’s Global Implications
  • Green Steel Adoption: With AGHC production hubs achieving cost parity, steel industries in Europe and Asia transition to green alternatives, reducing construction and automotive supply chain costs.
  • Fertilizer Production: Africa’s green hydrogen fuels ammonia production for fertilizers, reducing global agricultural input costs and stabilizing food prices.
  • Shipping Sector Transformation: Low-cost green hydrogen accelerates decarbonization of maritime shipping, reducing global trade inflation linked to energy price volatility.
By systematically integrating IIPPs to scale initiatives like the African Green Hydrogen Corridor, we demonstrate a clear pathway where green technologies achieve both sustainability and deflationary impacts—benefiting economies and consumers alike.

 

Mathematical Model for Cost Reduction Acceleration
To redefine Moore’s Law for green technologies, IIPPs address systemic barriers and optimize cost trajectories:

 

Cost Reduction Model:Where:

 

  • : Accelerated doubling time, reduced to under 5 years.
  • : IIPP factors including risk reduction, policy stability, and digital deployment.
As cost declines are accelerated, inflationary contributions of energy-intensive industries decrease proportionately:
Where reflects reduced energy-driven inflation through falling input costs.

 

Redefining Green Industrialization as a Deflationary Force
The African Green Hydrogen Corridor demonstrates that large-scale green technology deployment, driven by IIPPs, can simultaneously address climate challenges and economic headwinds. By aligning private capital, public guarantees, and AI-driven deployment, the AGHC delivers transformative results:
  • Deflationary Impact: Stabilized energy and input costs reduce inflation globally.
  • Economic Resilience: Industries gain cost advantages, improving competitiveness and consumer affordability.
  • Sustainability: Africa emerges as a green industrial hub, fueling global decarbonization goals.
Conclusion: Progress Beyond Sustainability
The future of green industrialization lies in scalability, affordability, and economic transformation. The African Green Hydrogen Corridor provides a replicable blueprint to achieve accelerated cost declines, surpass Moore’s Law, and establish green technologies as deflationary tools.

 

By leveraging Institutional Investor-Public Partnerships, we unlock not just sustainable progress but also economic relief for industries and consumers worldwide. This is how we redefine what progress means—a net-zero, deflationary, and equitable future where green technology innovation drives global economic resilience. Let us seize this moment.

Harnessing Blended Finance to Develop Affordable Housing in Africa

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With $1.2 Billion in Financing Arranged in the Last Two Years,

MiDA Advisors is Eating the Elephant One Big Bite at a Time

In Africa, the demand for housing far exceeds supply, and across the continent, only a small fraction of the population can afford the homes that exist-leading to a significant gap between current demand and the existing housing supply, with estimates pointing to a shortage of over 50 million units (CAHF 2023).To close the affordable housing gap and achieve one of the major objectives of Sustainable Development Goal (SDG) 11, which calls for adequate, safe, and affordable housing by 2030, greater investment in these same sorts of housing projects is essential.

Ultimately, housing development involves substantial capital required by developers and other stakeholders in the housing value chain that is often inaccessible in local capital markets, and local sponsors often face capacity and track record constraints that make accessing international capital markets unfeasible.

MiDA Advisors visiting affordable housing projects in Senegal

From the standpoint of many institutional investors, the lack of credit-worthy deals accessible through capital markets instruments is a binding factor in deploying capital at the kind of scales required to adequately address the problem.

In an attempt to develop a scalable solution in the affordable housing space, MiDA Advisors, acting as the lead transaction advisor, collaborated with Bank of America Securities, Brean Capital, The Bank of New York, and Cross-Boundary to establish an innovative blended finance solution in partnership with the local mortgage refinancing company, Caisse Regionale de Refinancement Hypothecaire de l’UEMOA (CRRH).

The solution provided CRRH with long-term financing at scale, allowing the institution to offer loans to member mortgage banks, which in turn on-lend in the form of long-term mortgage loans.

The financing package included a 17-year, $217 million Eurobond issued via a U.S. trust and a 36 billion CFA Franc ($64 million) domestic bond. The U.S. International Development Finance Corporation (DFC) provided a financial guaranty for the international bonds, while the U.S. Agency for International Development (USAID) and Prosper Africa contributed technical assistance funding to both de-risk the transaction with advisory support and reduce some early-stage transaction costs for CRRH. The highly rated U.S. bond issuance (AA rated by Moody’s) attracted new international investors to the region, pricing at yields below the region’s lower-rated Eurobonds trading in the international capital markets with similar tenors.

Of course, the impact of this transaction extends to the impacted communities. Through its collaboration with USAID-INVEST Project, MiDA Advisors engaged third-party, Finactu Groupe, to carry out an on-the-ground assessment of the impact of the transaction. Finactu’s estimates suggest that the transaction will generate over 8,935 new housing loans, benefiting more than 53,610 individuals across the UEMOA zone.

Aymeric Saha, CEO, MiDA Advisors
“At MiDA Advisors, we have been demonstrating how Africa can mobilize significant capital through blended financing solutions to address major challenges in social infrastructure such as affordable housing. The needs are great, and our expertise is enabling financing to be deployed at unprecedented scale with enhanced sustainability.”
– Aymeric Saha, CEO, MiDA Advisors

Of these loans, 55% are expected to finance affordable housing (valued at less than 15 million CFA, or approximately $25,000), and 40% will support middle-income housing (valued between 15 million CFA and 60 million CFA, or around $25,000-$100,000). Notably, over 86% of the mortgage applicants are expected to be first-time homebuyers. The benefits of these homes will be profound, and like housing generally, have far-reaching impacts on residents’ security, health, education, and financial stability, all of which align with several SDGs.

Importantly, this type of transaction has proven adaptable across regions and regulatory contexts. In early 2024, MiDA Advisors announced a $700 million blended financing deal with Acorn to finance the largest portfolio of student housing in Africa. In this transaction, DFC is providing a commitment of $180 million that will unlock over $500 million in local financing from Kenyan pension funds and financial institutions.

The funding provided from the transaction will facilitate the construction of 35 new affordable student housing facilities (totaling 48,000 beds) and create an estimated 50,000 new jobs in the local market. All buildings will be certified green under the IFC EDGE program, offering 20% energy, water, and material efficiency compared to conventional structures. Importantly, these buildings offer an affordable alternative to unsafe, unregulated, informal housing options for students. This is particularly relevant to female students who make up the majority of residents, since safe housing plays a significant factor in girls’ ability to access education and eventually graduate.

MiDA Advisors visiting affordable housing projects in Senegal

Most recently, MiDA Advisors announced a $228 million blended finance transaction for mortgage refinancing in Nigeria, partnering with the Nigeria Mortgage Refinance Company (NMRC) and Stanbic IBTC Bank.

Supported by a $200 million DFC commitment, the deal will allow NMRC to refinance loans, allowing banks to originate new loans with refinancing. In total, 20% of proceeds will benefit mortgage borrowers from informal market segments, and an estimated 40% of mortgages will be issued to women as primary borrowers or co-borrowers.

When looking at the details, these three transactions offer a compelling tale about how well-structured blended finance solutions with risk mitigation tools offered by U.S. development agencies like the DFC, Prosper Africa, and USAID, can mobilize substantial private capital towards the achievement of development objectives.

Through these three initiatives alone, MiDA Advisors has arranged close to $1.2 billion in investments, mostly from institutional investors, to support the construction of housing for over 100,000 individuals across Africa—impacting over 250,000 people in the impacted communities through the development of social infrastructure, direct construction jobs, and supporting goods and services. And importantly, these transactions lay the foundation for these institutions to build their track record and access capital markets again in the future at a comparable or greater scale.

Even now, although these transactions are quite sizeable, and will be highly impactful in the markets reached, they merely represent the start of a longer journey to supply the 51 million affordable housing units that the continent needs. Of course, for MiDA Advisors, which originated from the 2016 U.S. Government Initiative for Mobilizing Institutional Investors to Develop Africa’s Infrastructure (The MiDA Initiative), the best way to eat an elephant is one bite at a time, and from our point of view, within the past two years these have been significant bites.

How development banks are failing to attract enough private money to climate fight

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As officials from around the world strive this week to reach a deal on funding for poorer countries to tackle climate change, investment manager Rob Drijkoningen is the sort of person they’re hoping will help get them there.

Drijkoningen is head of emerging market debt at U.S. asset manager Neuberger Berman, which holds $27 billion in sovereign and corporate debt from developing countries. He should be a natural partner for multilateral development banks (MDBs) looking to find private sector investors for projects to slow climate change or cope with its effects.

Boosting private sector investment is, for rich nations, a crucial part of clinching a deal at the COP29 climate talks in Azerbaijan this week on a global commitment for annual funding to fight climate change – dubbed the New Collective Quantified Goal. Development banks committed to increase their lending to poorer countries to $120 billion a year by 2030. They also pledged to bring in an additional $65 billion annually in private sector cash to those nations.

But Drijkoningen, after speaking with the European Investment Bank (EIB) and European Bank for Reconstruction and Development (EBRD) about potential deals this year, decided there were too many hurdles to investment. Development banks, he said, are not willing to open their books and share enough information about investments’ risks. Nor do they allow private investors to pick and choose the projects that interest them. For asset managers already facing limited appetite from clients for long-term infrastructure assets in developing nations, those obstacles make investment unappealing.

“We would need to get a true sense of a level playing field: of getting equal access to information so that we can appropriately assess the merits,” Drijkoningen said. “That’s a cultural issue that I doubt we have come close to changing.”

Cash-strapped Western governments are pinning their hopes on a massive increase in private sector investment to reach the $2 trillion-plus, opens new tab needed annually to help poorer countries move to greener energy and protect against the impacts of extreme weather.

After a resounding win by climate denier Donald Trump in this month’s U.S. presidential election, worries are rising that the financing gap will steadily widen if Washington – and its dollars – pulls out of the global climate fight. An ongoing, two-year reform of multilateral institutions like the World Bank – aimed at overhauling the way they lend to make more use of their money – helped drive a 41% increase in the mobilisation of private sector funds to low income countries in 2022 across 27 development banks, a report this year showed, opens new tab.

The head of the EBRD, Odile Renaud-Basso, told Reuters the bank was working hard to provide more information to the private sector, but there were some limits to what could be made public.

But a Reuters analysis of lending data and interviews with two dozen development banks, climate negotiators, private sector investors and non-profits showed that change at multilateral lenders needs to accelerate significantly if the private sector is to fulfil its hoped-for role.

The analysis of total aggregate lending last year provided by 14 of the world’s top development banks showed that for each dollar invested across all markets just 88 cents of private money was sucked in. And that fell to just 0.44 cents of private money to poorer countries. Here, the banks made climate finance commitments of $75 billion and mobilised $33 billion of private investment.

A report by a group of independent experts, opens new tab for the G20 group of industrialised nations last year on how to strengthen multilateral development banks said the target that needed to be hit was $1.5 to $2 for every $1 of lending.

SLOW PROGRESS

Governments – which bankroll development banks – are pushing them to go reform faster. That should result in a more ambitious funding target in Baku – and help countries to skirt a politically contentious discussion on increasing the banks’ capital.

The EBRD now delivers $3.58 of private money for every $1 it invests across its portfolio, up from $2 dollars three years ago. IDB Invest – the private sector arm of the Inter-American Development Bank (IDB) – has also embarked on an overhaul of its business, helping to increase IDB Group’s mobilised private capital fivefold from 2019 to 2023 to $4.4 billion.

There are various ways for multilateral lenders to pull in private sector cash. The most established one is parceling up parts of their own loans and selling them to private investors, freeing up money to lend again. These so-called B-loans have been around for more than six decades.

But Nazmeera Moola, chief sustainability officer at asset management firm Ninety One, said that a raft of issues – including long lead times and returns that were sometimes unattractive – had diminished the appeal of these assets.

Meanwhile, many large institutional investors, such as pension funds or insurance companies, think of direct investing through corporate or project finance lending in emerging markets as “scary stuff”, she added.

Harmen van Wijnen, chair of the board of Dutch pension fund ABP, which has invested 1 billion euros in B-loan funds managed by development finance specialist ILX, said that taking the leap into unfamiliar risks – like project finance in emerging markets – would need to be mitigated by guarantees from multilateral lenders.

Some MDBs are already providing guarantees or structures that help reduce the risks, for example by hedging the risk of a collapse in the local currency. At COP29, some banks have flagged new initiatives including a move by the United States to guarantee $1 billion of existing loans to governments by the Asian Development Bank so it can lend a further $4.5 billion to climate-friendly projects.

The EBRD’s Renaud-Basso told Reuters it was also looking to guarantee sovereign lending to free up more money, without providing further details. Guarantees aside, the reluctance of some development banks to play the junior partner in project lending, amid pressure to land big deals and maximise their own returns, was leaving them in competition with private sector investors, according to half a dozen sources in the industry.

Gianpiero Nacci, EBRD Director for Sustainable Business and Infrastructure, said that while MDBs were starting to change their culture and structures to make them more focused on attracting private sector investment, it was a “work in progress”.

“We’re increasingly incentivising our banking teams to focus on mobilization,” he said, noting the EBRD is introducing internal targets beyond its own direct investment. Given the scale of the climate challenge, some development experts are choosing to go it alone, among them Hubert Danso, chief executive of Africa Investor, a platform that connects private investors with green infrastructure projects on the continent.

“We have an MDB market failure which is incapable of crowding in the private capital required,” he said.

Total amount of private climate finance in million U.S. dollars to countries around the world as mobilized by multilateral development banks has resumed its rise following the COVID-19 trough.
Total amount of private climate finance in million U.S. dollars to countries around the world as mobilized by multilateral development banks has resumed its rise following the COVID-19 trough.

CULTURAL HURDLES

In an August document, the Organisation for Economic Cooperation and Development (OECD), which tracks the climate finance efforts of multilateral institutions, found lack of data was a “major obstacle” to raising private investment to the required levels. The previously unpublished report, reviewed by Reuters, said a shortfall in transparent data was leading to private investors mispricing investment risk.

“For efficiency of markets, data is critical,” said Haje Schutte, a deputy director at the OECD. “There is an ethical and fairness dimension to that: these public sector institutions have a role to beyond their institutional self-interests.”

Some development banks are worried about sharing their proprietary information and require the OECD to sign non-disclosure agreements, Schutte said.

Alert to the criticism and following an investor consultation, MDBs have increased the credit risk data shared in a database called GEMs, originally designed to be used for information exchange between the banks themselves. Since March, some data on recovery rates for public as well as private lending has been made available and, in October, more historic data was offered. But some investors are demanding more granular risk information.

Erich Cripton, a director at Canadian pension fund CDPQ Global, which has over $300 billion in assets under management, said investors have been pushing for MDBS to publish more data in the GEMS database. He said the released data reflected the MDBs preferred creditor status meaning that for a private investor, the risk was higher.

For Nadia Nikolova, lead portfolio manager at Allianz Global Investor, who has raised over $3.5 billion in development finance and impact credit strategies, the lack of information hampers her ability to raise and invest capital in developing economies.

“Institutional investors have a fiduciary duty to invest money responsibly,” she said. “If I don’t have that information, I can’t price the risk.” Abdullahi Khalif, Somalia’s chief climate negotiator, acknowledged on the sidelines of the COP29 talks that investing there was riskier than in industrialized economies, but added those who did so had opportunities for good returns in areas including renewable energy and irrigation.

“The only private sector that can come is a private sector that is really looking forward to taking the risk.”

Source: Reuters

To get more capital, Africa needs more data

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The concept of risk is completely invented to ensure that investment doesn’t come to Africa,” Gagan Gupta told an audience of investors and entrepreneurs earlier this year, to resounding applause. Mr Gupta, whose firm works on logistics and utilities across Africa, is optimistic about the continent and scathing about outsiders’ ability to assess it.

Philippe Valahu, the boss of PIDG, an infrastructure-finance group, echoes the sentiment: “I spend a huge amount of my time dispelling risk perceptions,” he says. Aubrey Hruby, who advises investors on entering Africa, recalls that “one thing [Americans] always say is, what about corruption? I’m like, how many mayors in America are serving jail time right now for corruption?”

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G20 Nature Investment Roadmap Tabled by SMI Africa Council for Bold Global Action

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Leaders urged to prioritize nature as a cornerstone of economic resilience and climate action.

On the closing day of the G20 Summit, the Sustainable Markets Initiative (SMI) Africa Council (SMIAC) tabled the G20 Nature Investment Roadmap: A Leaders’ Guide to Formalizing African Nature as an Investable Asset Class on Public and Private Balance Sheets.

This pivotal roadmap, championed by the SMI Africa Council, calls on G20 Heads of State to redefine economic frameworks by embedding natural capital as an investable asset class. It provides a clear and actionable strategy for the global community to recognize the immense economic value of nature while safeguarding it for generations to come.

Nature: The Foundation of Global Resilience

Nature is the bedrock of societal well-being, economic stability, and climate resilience, yet it remains grossly undervalued. As global leaders increasingly recognize the critical link between natural ecosystems and economic vitality, the demand for investable, verifiable, and quantifiable commitments to restore and preserve nature has reached unprecedented levels.

The annual global nature investment gap has ballooned to $800 billion, highlighting the urgent need for bold, transformative global action. The Roadmap underscores the importance of institutional investor-public partnerships to scale up capital flows and deploy investments that protect biodiversity, mitigate climate risks, and unlock sustainable growth—particularly in Africa, a continent uniquely positioned to lead this effort.

Unlocking Africa’s Natural Capital for Global Prosperity

Africa’s natural capital—its forests, wetlands, biodiversity, and ecosystems—offers a transformative economic opportunity. Properly integrating this capital into corporate and public accounting systems will attract billions in financing, drive progress toward the Sustainable Development Goals (SDGs), and fulfill Nationally Determined Contributions (NDCs).

Dr. Hubert Danso, Co-Chair of the SMI Africa Council, stressed the urgency of action:
“Institutional investors commanding over $300 trillion globally can decarbonize their portfolios, but they cannot de-nature them. By fostering institutional investor-public partnerships, we can create a nature-positive investment landscape that delivers for nature, people, and the planet.”

Five Bold Actions for Leaders

The Roadmap calls on Heads of State to demonstrate “Nature Investment Statesmanship” by taking five decisive actions:

  1. Champion the integration of International Accounting Standard (IAS) 37 and IAS 38 to report emissions and nature investments as obligations and assets.
  2. Incentivize private ecosystem investment through tax breaks under IAS 38.
  3. Establish national natural capital frameworks to quantify and account for biodiversity and natural assets in NDC’s and national strategies.
  4. Invest in geo-spatial data infrastructure to enable accurate and transparent natural capital reporting.
  5. Encourage private institutions to mainstream natural capital in risk assessments and transition plans.

Closing the Gap, Building a Sustainable Future

The Roadmap offers detailed recommendations to standardize accounting frameworks, embed IAS 37 and IAS 38 standards, and bridge the $800 billion annual funding gap for nature-positive investments. These efforts are essential for addressing the interconnected crises of climate change and biodiversity loss.

A Global Call to Action

With the historic opportunities presented by South Africa’s G20 Presidency, the Finance COP29 Presidency, and Brazil’s COP30 Presidency, the SMI Africa Council’s Roadmap serves as a transformative blueprint for integrating natural capital into global economic systems.

Dr. Danso concluded:
“Together, we can deliver transformative global climate action that benefits nature, people, and the planet—today and for generations to come.”

Read the full Roadmap

Ends

About The Sustainable Markets Initiative (SMI) – www.sustainable-markets.org

Established by His Majesty King Charles III and launched at Davos, The Sustainable Markets Initiative (SMI) is the ‘go-to’ CEO-led private sector organisation on the transition to a sustainable future.

About The SMI Africa Council (SMIAC)

The SMI Africa Council (SMIAC) was led by His Majesty King Charles III in recognition of the current realities of the African continent’s 1.3 billion people, and the shared ambition of its 55 countries to establish a common position through the Nairobi Declaration (Africa’s Green Investment Deal) in combatting climate change, biodiversity loss and fulfilling its Nationally Determined Contributions (NDCs) and the Sustainable Development Goals (“SDGs”).

Launched in November 2023 in Nairobi, Kenya, the SMIAC champions scalable collective action by business, finance/investment, and government leaders to benefit people, the planet, and nature.

 

COP29 Finance Day: SMI Africa Council Launches African Green Industrial Cities Briefing

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African Green Industrial Cities: A Place-Based Institutional Investor-Public Partnership to Propel Africa’s Green Industrialization

The Sustainable Markets Initiative (SMI) Africa Council (SMIAC) launched its African Green Industrial Cities Briefing today on COP29 Finance Day. The briefing, aligned with the COP29 Presidency’s Green Energy Declaration Pledge on Green Energy Zones and Corridors, presents Africa’s Green Industrial Cities (GICs) as a compelling new asset class with catalytic investment potential.

Rooted in the Nairobi Declaration, (Africa’s Green Investment Deal) and aligned with global market signals like the EU Green Deal’s Net Zero Industry Act and the U.S. Inflation Reduction Act, the briefing highlights Africa’s essential role in the $10 trillion-per-year and growing global green industrial economy.

Key Highlights:

  • Green Industrial Cities as a Unique Asset Class: Developed through the SMI Africa Council’s Investable Asset Classes Working Group (SMIAC-IACWG) with support from DLA Piper and WSP, GICs represent place-based investment platforms designed to drive Africa’s green industrialization through renewable energy, low-carbon industries, and sustainable infrastructure.
  • Alignment with Global Climate Goals: GICs are positioned to mobilize private capital to support Africa’s Nationally Determined Contributions (NDCs) and Sustainable Development Goals (SDGs), advancing climate resilience, energy security, and sustainable development across the continent.
  • Catalyzing the Global Green Transition: GICs aim to establish Africa as a global green industrial leader by integrating African markets into worldwide clean energy and technology value chains. This approach creates a $3 trillion NDC-aligned investment platform, fostering green job creation and sustainable economic growth.
  • Institutional Investor-Public Partnerships (IIPPs): The IIPPs framework is central to the GIC model, uniting governments, institutional investors, the private sector, philanthropies, city mayors, and development partners to build financially viable, resilient investment programs that are risk-adjusted for long-term sustainability and industrial competitiveness.
  • Global Partnerships and Risk Mitigation: Aligned with global climate initiatives from the Commonwealth, G20, G7, Inflation Reduction Act, Etihad7, BRICS, and the EU Green Deal, the GIC model addresses typical barriers such as political and forex risks. Co-investments with African asset owners and long-term, bankable offtake agreements with global and local corporations enhance scalability and reduce risk for institutional investors.

Call to Action:

Dr. Hubert Danso, Co-Chair of the SMI Africa Council and CEO of the Africa Investor (Ai) Group, urged Heads of Government, institutional investors, city mayors, the private sector, philanthropies, and development partners to collectively champion the development of African Green Industrial Cities.

He stated, “Through Institutional Investor-Public Partnerships, stakeholders can significantly advance Africa’s green economy, creating impactful economic, environmental, and social benefits not only for Africa but the world.”

Aligned with the COP29 Green Zones and Corridors Declaration Pledge and the African Union’s Nairobi Declaration (Africa’s Green Investment Deal), African Green Industrial Cities are poised to drive sustainable development, support a just energy transition, and deliver portfolio resilience for domestic and global institutional investors.

Read the briefing here

Ends

About The Sustainable Markets Initiative (SMI) – www.sustainable-markets.org

Established by His Majesty King Charles III and launched at Davos, The Sustainable Markets Initiative (SMI) is the ‘go-to’ CEO-led private sector organisation on the transition to a sustainable future.

About The SMI Africa Council (SMIAC)

The SMI Africa Council (SMIAC) was led by His Majesty King Charles III in recognition of the current realities of the African continent’s 1.3 billion people, and the shared ambition of its 55 countries to establish a common position through the Nairobi Declaration (Africa’s Green Investment Deal) in combatting climate change, biodiversity loss and fulfilling its Nationally Determined Contributions (NDCs) and the Sustainable Development Goals (“SDGs”).

Launched in November 2023 in Nairobi, Kenya, the SMIAC champions scalable collective action by business, finance/investment and governments leaders to benefit people, planet and nature.

Natural Capital on African Governments’ Balance Sheets initiative introduced at COP16

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The Sustainable Markets Initiative (SMI) Africa Council has unveiled a new initiative aimed at making natural assets a core component of national balance sheets.

The Natural Capital on African Governments’ Balance Sheets initiative is an institutional investor-public partnership led by the SMI Africa Council, which brings together institutional, technology and legal partners such as the African Union Commission, Africa Investor Group, the Great Green Wall of Africa Foundation, AUDA-NEPAD, the Landbanking Group and Mishcon de Reya.

The Natural Capital on African Governments’ Balance Sheets initiative was announced at COP16, currently taking place from Oct. 21 to Nov. 1 in Cali, Colombia.

This initiative will embed nature as an investable asset class within national economic frameworks and investment portfolios to unlock real investments at scale.

Globally, there is a potential $800 billion annual investment opportunity in nature-based solutions, as Africa’s forests, wetlands and biodiversity play a vital role in global decarbonization. Yet, they remain undervalued in traditional economic models, and businesses and investors lack the means to invest with scale into the ecosystems they depend on.

Some of the major barriers include the lack of standardized methodologies for valuing natural capital and the absence of market mechanisms that align business and investor incentives with natural capital preservation and regeneration. It is believed unlocking their value will provide new sources of wealth for Africa by integrating natural resource accounting and developing national standards.

The SMI initiative seeks to accelerate the implementation of the African Union’s Nairobi Declaration (Africa’s Green Investment Deal) launched by African heads of state at the inaugural Africa Climate Summit in Nairobi in September 2023.

“Africa’s natural capital forms the backbone not only of our economies but also of global business models and societies.To protect and expand this value, we must invest at scale in our ecosystems. Through mandate-aligned institutional investor-public partnerships with governments, we can unlock risk- and nature-adjusted returns that drive benefits for people, planet and nature — demonstrating that what’s good for Africa and the world can also create sustainable value for investors.” said Dr. Hubert Danso, co-chair of the SMI Africa Council.
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