The challenge of climate change demands innovative solutions, especially for African governments looking to accelerate green development and economic growth. Enter the Institutional Investor-Public Partnerships (IIPP) framework’s Presidential Climate Investment Authority (PCIA) — a game-changing platform designed and championed by the African Green Infrastructure Investment Bank (AfGIIB), the African Union, Africa investor (Ai), the Sustainable Markets Initiative (SMI) Africa Council, DLA Piper and the CFA Asset Owners Council (AoC), to mobilize capital at an unprecedented scale.

By fostering Presidential-led collaboration with institutional investors as universal owners, the PCIA stands as a powerful and timely mechanism to transform climate commitments into actionable, bankable projects, aligning with Africa’s $3 trillion of Nationally Determined Contributions (NDCs) opportunities and driving the green industrialization agenda set forth in the Nairobi Declaration.

The Strategic Role of the Presidential Climate Procurement Authority

At the heart of the PCIA is the Climate Procurement Authority (CPA), a specialized body embedded within the Office of the President. The CPA’s mandate is multifaceted and strategically focused on creating an enabling environment for private climate investments at scale. It acts as a bridge between governmental bodies, public corporations, and private investors, ensuring seamless cooperation and alignment with ambitious NDC climate goals. Here’s how:

1. Centralized Coordination: The CPA liaises with UNFCCC National Focal Points and the African Union Commission, ensuring that climate projects are not only nationally relevant but also regionally and globally significant. This alignment facilitates the sharing of best practices and model IIPPs standardized contracts, enhancing the quality and effectiveness of climate investments.
2. Policy Formulation and Incentives: By developing state policies and incentives, the CPA makes climate projects attractive and aligns the interests of governments with domestic and global institutional investors alike. This includes creating frameworks that de-risk investments and offer compelling climate and risk adjusted return opportunities for both domestic and international public and private sector players.
3. Capacity Building: Recognizing the importance of human capital, the CPA is committed to developing professional skills and resources. This includes recruitment and training programs, ensuring that personnel are well-equipped to manage and execute complex climate investment projects.

Mobilizing Trillions: The PCIA’s Potential

The PCIA’s potential to crowd-in private sector capital is immense. Here’s why:

1. Scalability: The IIPPs framework is designed to mobilize capital at-scale, attracting trillions in investment. This is crucial for funding the vast array of climate projects needed to meet NDCs and drive sustainable development and Africa’s just energy transition.
2. Bankable Projects: By uplifting private sector-originated, bankable projects, the PCIA ensures that investments are not only viable but transforms African green industrial infrastructure into a globally competitive investable asset class. This approach attracts a wider range of investors, particularly institutional investors representing over $300trn of assets worldwide mandated to pursue stable, long-term climate and risk adjusted returns.
3. Joint Procurement and Collaboration: The CPA’s ability to engage in joint procurement with entities from other countries amplifies its reach, impact and potential for long duration bankable offtakes for energy and green technologies manufactured in Africa. This collaborative approach allows for the pooling of resources, expertise, and the re-characterizing of risk, making large-scale climate projects more feasible and attractive to long term investors.

The Nairobi Declaration and Green Industrialization

The Nairobi Declaration underscores the urgency of mobilizing private capital for green industrialization in Africa. The PCIA aligns perfectly with this vision, providing a structured pathway for investment in green industrial infrastructure, renewable energy, nature as an investable asset class on Africa’s balance sheet and other NDC climate-resilient projects. By doing so, it addresses key challenges such as energy access, economic diversification, and sustainable development, setting the stage for a prosperous and investable, low-carbon future for all.

A Framework for Success

The PCIA’s robust legal and operational framework is designed for success. It ensures:

• Legal Clarity and Flexibility: The CPA operates under a clear legal Institutional investor public partnership mandate, with the flexibility to engage in joint procurement and establish joint entities. This legal clarity comforts and de-risks investors by providing a stable and predictable globally respected investment environment.
• Accountability and Transparency: The CPA is accountable to the highest sovereign office and aligned with NDC commitments, ensuring transparency and adherence to the domestic and international rule of law. This builds investor confidence and fosters a culture of trust and cooperation.

Conclusion

The Institutional Investor-Public Partnerships framework’s Presidential Climate Investment Authority represents a transformative private capital mobilization platform for climate investments at-scale across Africa. By leveraging institutional investor-public partnerships, fostering regional and international collaboration, and creating an enabling environment for large-scale green industrial infrastructure investments, the PCIA is poised to fast-track the development of bankable, NDC-aligned climate projects.

The PCIA is being welcomed by African leaders as a beacon of innovation for NDCs private capital mobilization needs and a critical tool for African governments to realize the green industrialization investment goals of the Nairobi Declaration, driving sustainable economic growth for the benefit of Africa’s just energy transition, global decarbonization, and the well-being of people, planet, and nature.

For more information on Institutional Investor Public Partnerships (IIPPs) visit: www.iipphub.com

Publish What You Fund, a global campaign for aid transparency, has published a draft proposal outlining a new approach for boosting private capital mobilization (PCM) for emerging markets and developing economies (EMDEs).

According to an executive summary of the draft proposal, there is a desire for more resources for multilateral development banks (MDBs) and development finance institutions (DFIs) to help address global challenges. At the same time, there have been strong calls for reform of these development banks, including efforts to increase the ways in which DFIs can significantly mobilize the private sector, as well as to manage their assets and accounts to free up more capital for investments in development.

According to Publish What You Fund, one of the most urgent calls has been to increase PCM to close the financing gap needed to meet Sustainable Development Goals. In 2023, the G20 Independent Expert Group recommended PCM be increased to $240 billion annually by 2030, yet current PCM rates have stagnated at just under $64 billion annually.

Through multi-stakeholder consultations, including with DFIs, shareholders, private-sector representatives and subject-matter experts, Publish What You Fund’s report proposes both PCM measurement and disclosure as ways to move the needle. It defines both an improved measurement approach and the disaggregated project-level disclosure that is a prerequisite to reaching PCM at scale.

“Improved measurement of PCM is the first important step,” states the proposal. “The second, and probably more critical, is disaggregated disclosure at a level that is sufficient to understand and analyze PCM. The current state of transparency is wholly inadequate to do either.”

The proposal sets out three main baskets for measuring PCM: Balance sheet mobilization (including private DFI equity, hybrid capital, and bonds), primary private capital mobilization (including direct and indirect mobilization through co-investment), and secondary private capital mobilization (including secondary transactions distributing risk to the private sector).

In terms of disaggregation, the proposal states generally, PCM disclosure is now aggregated, with only limited levels of disaggregation, which is problematic because not all mobilized capital is equal. Aggregation also masks outliers that can significantly skew the data and distort the overall picture. To address these concerns, Publish What You Fund is calling for disclosure by investment, instrument, country, sector, amounts mobilized and the typology of the mobilized party (e.g., whether the mobilized party is a domestic bank, or a regional private equity fund). DFIs have expressed concerns, however, about commercially sensitive information becoming public and potential breaches of client agreements.

Hubert Danso, chairman and CEO of Africa Investor (Ai) Group, chair, CFA Asset Owners Council and co-chair SMI Africa Council, has published a commentary pledging support for the proposal and urging the institutional investment community to speak up to support efforts for better mobilization data, stating investors’ lack of willingness to share data is often a reason given by DFIs as to why this information isn’t available.

“The irony with private capital mobilization data is that we need the information yet are commonly cited as the main barrier to it becoming available,” wrote Danso in a piece titled, “Private Capital Mobilisation — why we need to speak up, not just pay up.”

Danso believes current efforts by MDBs to mobilize private capital are “grossly suboptimal,” with the potential to close only 10 percent of EMDEs private financing gap between now and 2030 to 2050, with the institutional investment community being counted on close the outstanding 90 percent of EMDEs’ private financing gap left by “the MDBs private capital mobilization market failure,” according to Danso.

It is estimated that it will take trillions annually to close the climate financing gap for EMDEs by 2050.

“Let’s not forget that PCM is about us,” Danso wrote. “We’re the ones being counted as mobilized. So, we need to be clear. We need this data. We believe that Publish What You Fund’s proposed approach to disclosing PCM data meets our needs and is wholly reasonable within existing business practices and confidentiality agreements. And we are willing for all of the investments where our resources are being counted as ‘mobilized’ to be subject to this level of disclosure.”

He added: “We’ll play our part, but we need DFIs and heads of state, as sovereign shareholders of MDBs to ensure MDBs play theirs.”

To read Danso’s commentary in full, click here.

Source: IREI

Dr Hubert Danso, Chairman and CEO of Africa Investor (Ai) Group, Chair, CFA Asset Owners Council, Co-Chair SMI Africa Council.

The concept of Private Capital Mobilisation (PCM) is being touted as a big part of the solution to the ever-growing SDG and climate financing gap for emerging markets and developing economies (EMDEs) requiring additional trillions annually to 2050. Development experts and governments are increasingly calling upon the private sector to plug the tens of trillions of dollars gap in development finance and investment needed, to address challenges around the new collective quantified goal on climate finance (NCQG), green industrial infrastructure investing requirements, and a host of other issues in emerging economies, which will be central themes at the UN Summit for the Future, the UN Financing for Development (FfD) Summit, CoP29 and the G20.

Current efforts by Multilateral Development Banks (MDBs) to mobilize private capital are grossly sub-optimal, with the potential to close only a mere 10% of EMDEs private financing gap between now and 2030-2050, even after recently announced significant private capital mobilization reforms. The domestic and global institutional investment community, as universal owners, are required now more than ever to assist through institutional investor-public partnerships (IIPPs), close the outstanding 90% of EMDEs private financing gap left by the MDBs private capital mobilization market failure.

The expectations about what the private capital can contribute are high. And from our side, I’m not sure we have the information we need to fulfill this role.

Data is the lifeblood of our industry. It is even more vital in sectors and geographies where we have less experience and need the data to guide us, identify opportunities, and illuminate potential risks. I’m talking about emerging markets. Emerging markets are the places where our resources can have the most impact yet where we need data the most. The pioneers in this space, the MDBs and bilateral development finance institutions (DFIs) such as the International Finance Corporation (IFC), African Development Bank or IDB Invest are increasingly conceding to political and investor pressure to share more and more information about the performance of their investments.

However certain areas, such as the risk and default data held within the Global Emerging Markets (GEMs) database owned by their exclusive club of the most influential MDBs, aren’t moving quickly enough. The delivery of the G20 mandated directive to the GEMs Consortium, to implement GEMs 2.0 as a separate entity to interface with investors and transition GEM’s 2.0 from mere disclosure, to leverage the investor-led GEMs 3.0 initiative, a broader asset allocation at-scale data platform with private risk takers representing over US$200 trillion of assets, would more effectively bridge the climate and SDG financing gaps in EMDEs.

PCM data is another area with too little transparency.

To be clear, when I’m talking about PCM data I’m referring to information about the private sector entities which come in alongside DFIs to provide resources to specific investments. This could be in the form of syndications, instances where DFIs have provided guarantees or a number of other examples. Current PCM data is available from two sources – the OECD and also a joint report produced by the MDBs. Both provide very high levels of data aggregation that are almost meaningless if you want to understand what types of private entities are in what types of deals in which sectors and geographies. I know firsthand just how many of you are passionate about doing more in emerging markets, targeting impactful mandate-aligned resilient investments, and ensuring that we play our part. But we’re going to need better data to understand what that “part” entails, and where we can best contribute.

The irony with Private Capital Mobilisation data is that we need the information yet are commonly cited as the main barrier to it becoming available. This was the case at the launch of Publish What You Fund’s new report on Private Capital Mobilisation during the World Bank’s Spring meetings. After introductions by the US Treasury Department, an IFC representative stated that clients and mobilised parties wouldn’t accept the disclosure of information using the approach which Publish What You Fund is proposing. Their approach seeks to capture the benefits of disclosure while still protecting sensitive information. To achieve this they propose project-level disclosure that provides the type of mobilised party but not the identity of the individual investor. Specifically, in line with our proposals, they are suggesting that DFIs publish, for each investment, the following information:

• Investment name
• Investment value
• Total amount mobilised
• Geography
• Investment instrument
• Sector
• Disaggregated mobilisation amounts
• Typology of mobilised party e.g. International Bank, Pension Fund, Sovereign Wealth Fund, Family Office, etc.

Publish What You Fund have gone to the effort of speaking to many clients and mobilised parties of DFIs. They are all saying the same thing. This approach is reasonable. DFIs commonly cite concerns about such granular data being subject to “reverse engineering” to identify specific parties, explaining that they fear this would put them in breach of their confidentiality agreements with clients. The stakeholder organisations which Publish What You Fund consulted don’t hold this concern, and I can see why. Much of this information is already publicly available, or at least available through paid-for platforms. Where it’s not it can often be inferred by combining multiple information sources. More importantly, it feels wholly reasonable within the limits of standard business practice in our sector. As a minimum DFIs should be checking with their clients as to whether this information represents a genuine concern for them and if not amend disclosure agreements accordingly.

Ultimately everything in our sector can be reverse-engineered to figure out who is involved in which deals. But there is a difference between listing all of the parties in a transaction so that a deadline-pressured journalist can drop the name of your organisation into an article without any real due diligence, versus the approach being proposed here. If there is any risk to any party as a result of this approach I’m convinced that the benefits of making this data publicly available will outweigh those risks ten-fold.

Let’s not forget that PCM is about us. We’re the ones being counted as mobilised. So we need to be clear. We need this data. We believe that Publish What You Fund’s proposed approach to disclosing PCM data meets our needs and is wholly reasonable within existing business practices and confidentiality agreements. And we are willing for all of the investments where our resources are being counted as “mobilised” to be subject to this level of disclosure. We’ll play our part, but we need DFIs and Heads of State, as sovereign shareholders of MDBs to ensure MDBs play theirs.

End

Africa investor (Ai) today confirmed Dr. Hubert Danso, its CEO and Chairman, and the Chairman of the African Union’s Continental Business Network (CBN), the African Green Infrastructure Investment Bank (AfGIIB), and Co-Chair of the Sustainable Markets Initiative (SMI) Africa Council, shared investor insights on the World Economic Forum’s First Movers Coalition (FMC) studio panel session on Surfacing the Supply of Zero-Emission Fuels and Clean Technologies in South Africa.

The panel accompanied the launch of the FMC’s white paper on “Decarbonizing South Africa’s shipping and trucking sectors following the workshop that FMC held in South Africa on surfacing the supply of zero-emission fuels.

In this wide-ranging panel discussion, Dr. Danso addressed the strategic investments and partnerships required to position South Africa as a leader in zero-emission fuels and clean technologies for the shipping and trucking sectors, within a global and continental sustainable energy transition context. Dr. Danso shared insights on how the Africa investor Group is leveraging international and regional financing opportunities to support the development of green hydrogen projects in South Africa and the continent, and the growing importance of establishing Africa Green Industrial Infrastructure as an investable asset class through Institutional Investor-Public Partnerships (IIPPs) and the African Green Infrastructure Investment Bank (AfGIIB).

Speaking on the panel, Dr. Danso highlighted, “The energy transition is a megatrend. It needs real multibillion-dollar investment platforms and mega funds to deliver South Africa’s $20 billion portfolio of green hydrogen projects and even larger opportunities that sit around renewables. There is a need to continue creating an emphasis around how we communicate the opportunity in the best and most structured fashion to the global institutional investment community. That is going to be the only pool of capital big enough to drive these ambitious projects.”

Dr. Danso introduced the complex role institutional investors are playing as universal owners, engaging bankable investee companies with proven transition technologies and sustainable energy solutions, to provide essential private sector leadership in Africa’s just energy transformation through Green Industrial Cities initiatives, aimed at creating green jobs and establishing Africa as a world-leading, investable manufacturing hub for green technologies.

View the panel highlights

Visit First Movers Coalition web page: South Africa’s Shipping and Trucking Sectors virtual panel discussion – First Movers Coalition (weforum.org)

Rome, Johannesburg, Nairobi, Lagos, Washington

Africa investor (Ai), a leading international investment group, announced today following the Partnership for Global Infrastructure and Investment (PGI) meeting at the G7 Summit that African Heads of State, governments, investment champions, the private sector, philanthropies, and development finance partners will again be recognized for their NDC investment mobilization initiatives by the 2024 Africa investor (Ai) NDC Investment Awards.

The prestigious Africa investor (Ai) NDC Investment Awards were launched at the Commonwealth Heads of Government Meeting (CHOGM) in Kigali, with the inaugural 2022 Awards presented under Africa’s COP Presidency at COP27 in Sharm El Sheikh. The 2023 Awards were presented at COP28 in Dubai in collaboration with the COP28 UAE Presidency, and the 2024 NDC Awards will be presented in November during COP29 in Baku, Azerbaijan.

Hosted by Africa investor (Ai) and sponsored by the African Green Infrastructure Investment Bank (AfGIIB), these NDC Awards are the only international, pan-African NDC Investment Awards that recognize and reward both public and private sector institutions working to innovate and mobilize private capital at scale for Africa’s bankable NDC investment commitments and projects. Africa needs to mobilize $3 trillion to implement its NDC investment opportunities by 2030, while the whole world only managed to mobilize $2.8 trillion for renewable energy investments over the past 20 years, with Africa receiving only 2% of that global sum.

The NDC Investment Awards are the premier NDC institutional investor-public-private partnerships (IIPPs) platform, designed to inspire greater ambition, accelerate NDC implementation, and showcase investment success stories. This assists in mobilizing private capital at scale to close Africa’s multi-trillion-dollar NDC climate financing and green industrial infrastructure investment gap.

Commenting on the Ai NDC Investment Awards Announcement and Call for Entries, Dr. Hubert Danso, Chairman of Africa investor Group and Chair of the NDC Awards Adjudication panel, said,

“The importance of the Ai Africa NDC Investment Awards cannot be overstated, given that Africa’s $3 trillion NDC investment requirements will need to mobilize and secure unprecedented allocations of private capital at-scale and speed, at a time when global aid and net financial transfers to Africa have fallen to their lowest level since the global financial crisis.”

Dr. Danso went on to highlight that investing at scale in ambitious African NDCs offers governments and investors a unique institutional investor-public partnership platform. This platform harnesses the Nairobi Declaration (Africa’s Green Investment Deal), the African Green Industrialization Initiative (AGII), the African Green Infrastructure Investment Bank (AfGIIB), the African Continental Free Trade Area (AfCFTA), and the G7 Partnership for Global Infrastructure and Investment (PGI), to de-risk and deliver Africa’s just energy transition and align the future of global green industrialization, finance, and long-term private capital for the benefit of investment stakeholders, people, planet, and nature.

The 2024 African NDC Investment Awards will be presented to African Heads of State, Governments, Investors, Development Finance Partners, Companies, and Philanthropies through the following categories:

Presidential Investment Statesman of the Year:
1. Presidential Green Infrastructure Investment Statesman of the Year
2. Presidential Just Transition Investment Statesman of the Year
3. Presidential Carbon Exchange Investment Statesman of the Year
4. Presidential Transport Investment Statesman of the Year
5. Presidential Water Investment Statesman of the Year
6. Presidential Agriculture Investment Statesman of the Year
7. Presidential Energy Investment Statesman of the Year

Best NDC Sector Investment Initiatives of the Year:
1. Best Waste NDC Investment Initiative of the Year
2. Best Energy NDC Investment of the Year
3. Best Transport NDC Investment Initiative of the Year
4. Best Urban Development NDC Investment Initiative of the Year
5. Best Forestry NDC Investment Initiative of the Year
6. Best Agriculture NDC Investment Initiative of the Year
7. Best Health NDC Investment Initiative of the Year
8. Best Water NDC Investment Initiative of the Year

Private Capital Mobilization Initiatives of the Year:
1. Best Natural Capital NDC Investment Initiative of the Year
2. Best Green Industrialization NDC Investment Initiative of the Year
3. Best Bankable Donor NDC Investment Initiative of the Year
4. Best Blended Investment NDC Investment Initiative of the Year
5. Best Investable NDC Adaptation Investment Initiative of the Year
6. Best Financeable NDC City Investment Initiative of the Year
7. Best GreenTech NDC Investment Initiative of the Year
8. Best Youth NDC Investment Initiative of the Year

The deadline for Award entry submissions is August 30, 2024. The shortlist will be announced on September 24, 2024, during UN Climate Week at the Africa investor (Ai) Summit in New York. The 2024 NDC Investment Award winners will be announced in November during COP29.

Entry is a simple 500-word nomination outlining how your organization meets the awards criteria. Entries from any public or private sector institution, whether African or international, are welcome provided they meet the category entry criteria.

DOWNLOAD NDC INVESTMENT AWARDS ENTRY PACK HERE
To submit your entry, please click here.

ENDS

Note to Editors For more information on the Ai African NDC Investment Awards, visit: www.ndcinvestmentawards.com, or email: tmutasa@africainvestor.com

About The NDC Investment Awards Headline Sponsor:
The African Green Infrastructure Investment Bank (AfGIIB)
The African Green Infrastructure Investment Bank (AfGIIB) is an African Union-convened and supported African institutional investor-led global climate investment platform to catalyze institutional private capital at scale for African green industrial infrastructure investment opportunities. Visit www.afgiib.com

About The NDC Investment Awards Host:
The Africa investor (Ai) Group
Africa investor (Ai) Group is an institutional investment holding platform that aligns its pools of capital from sovereign wealth funds, pension funds, family offices, and long-term investors with vetted infrastructure, private equity, and technology investment opportunities in Africa. Visit www.africainvestor.com

Enforcing Minimum Africa Trade In-Value Added Standards to Align with SDGs, Nairobi Declaration and the Just Energy Transition”

As leaders in the global economy, G7/G20 Heads of State and global institutional investors, have a fiduciary responsibility to uphold ethical standards and promote sustainable practices. Embracing Environmental, Social, and Governance (ESG) principles is not just a moral imperative but also a strategic imperative for long-term economic stability and prosperity.

Therefore, endorsing and adopting the policy recommendation to regulate thresholds against low levels of ‘trade in value-added’ goods (TIVA) as an anti-ESG and punitive discriminatory trade practice, is crucial for advancing human rights, promoting equitable economic development, the just transition, and ensuring the sustainability of investments, people and the planet.

Promoting Human Rights:

By regulating low levels of trade in value-added goods from global value chains, G7 Heads of State and global institutional investors can actively address the ‘S’ in ESG’ and combat conventional, unjust, exploitative, systemic discriminatory international trade practices and promote human rights in supply chains.

Ensuring that investee and portfolio companies have a significant portion of their value-added goods supply chains sourced from Africa, encourages fair labour practices, protects workers’ rights, and fosters inclusive industrial economic growth across the continent and equitable access to global markets.

Fostering Economic Development:

Prioritizing high-value TIVA from Africa over low-value raw materials is instrumental in fostering sustainable economic development and green industrialization on the continent in line with the African Union’s Nairobi Declaration (Africa’s Green Investment Deal), the asset-owner-led African Green Infrastructure Investment Bank (AfGIIB), the African Continental Free Trade Area (AfCFTA), the Africa Green Industrialisation Initiative (AGII) and the African Unions 5% Infrastructure Investment Allocation Agenda.

By incentivizing investments in value-added production and green technology manufacturing, this policy recommendation promotes local job creation, green industrialization, skills development, and technology transfer, ultimately contributing to poverty reduction, sustainable development goals, and Africa’s just energy transition at industrial scale.

Enhancing Investment Returns:

Embracing ESG best practices, including the promotion of value-added trade, not only aligns with ethical considerations and institutional investor-public partnerships (IIPPs) best practices but also enhances market-appropriate investment returns for long-term investors.

Companies with diversified, greener, and resilient supply chains are better equipped to navigate market volatility, regulatory changes, climate change, landed cost advantages and reputational risks.

Therefore, integrating TIVA-ESG threshold criteria into investment decision-making processes can lead to more sustainable, competitive, and profitable outcomes for public and private investors and stakeholders.

Mitigating Systemic Risks:

Addressing the inequities and vulnerabilities inherent in the current global trade practices affecting Africa is essential for mitigating systemic risks and promoting financial stability.

By promoting inclusive sustainable economic growth and transforming extractive industries into green industrial globally competitive value chains, G7/G20 Heads of State and global institutional investors can contribute to building more resilient and sustainable economies, less susceptible to external shocks and geopolitical tensions, whilst earning market appropriate returns from increased access to the $10trn and growing global green industrial economy, which will be valued at a quintillion dollars this century.

Demonstrating Leadership:

Endorsing and adopting the policy recommendation to regulate trade in value-added goods as an ESG and sustainability imperative, sends a powerful signal of leadership and commitment to responsible long-term investing and sustainable development.

As stewards of global capital and sovereign assets, global institutional investors  and G7/G20 Heads of State, have the influence and leverage to drive positive change and shape the future of global commerce and the global green industrial economy, in alignment with best sustainability and ESG principles.

In conclusion, endorsing and adopting the policy recommendation to regulate trade in value-added goods as an ESG and sustainability imperative, is not only ethically imperative, but also strategically beneficial for Heads of State and global institutional investors.

By promoting human rights, fostering economic development, enhancing investment returns, mitigating systemic risks, and demonstrating leadership, this TIVA-ESG policy recommendation aligns with the broader objectives of the sustainable development goals, the Paris Agreement, the Nairobi Declaration, and the just energy transition, to enshrine inclusive prosperity for all stakeholders.

Ends

Appendix 1 – Investors Board of Trustee Template for Special TIVA Resolution

Resolution of the Board of Trustees of [Insert Institution]

Preamble:

The Articles of Agreement of (Insert institution) outline the institutions’ purposes. In recognition of the global climate just transition and trade inequality emergency for Africa and the industrial climate investment opportunities affecting our beneficiaries, we, the Board of Trustees of [Insert Institution], hereby resolve to expand the existing purpose within our Agreement, specifically in [Insert Relevant Article], to include the following:

Resolution:

“The purpose of this institution shall include the promotion of sustainable economic development and social progress among its beneficiary members, both individually and collectively.

This includes explicit commitments to enforce Trade in Value Added (TIVA) standards. These standards mandate that a minimum threshold of value-added goods for finished products must originate from Africa. This is to ensure that investments and client companies do not engage in practices where raw materials extracted from Africa are indiscriminately processed and add value outside of the continent.

We, the Board of Trustees, adopt this resolution in recognition of the critical linkages between trade, human inequality, trade discrimination, SDG 10, climate change, social equity, the just transition, obligations under the Task Force for Inequality-related Financial Disclosures (TIFD), and the long-term development goals of our members.”

Appendix 2 – Template for the Terms of Reference for the Board TIVA Committee

Purpose:

The primary purpose of the Committee is to assist the Board in setting and enforcing TIVA Threshold targets and overseeing their implementation through regular reviews.

The Committee provides strategic guidance to management on the direction and objectives appropriate for achieving these targets and monitors performance against them.

Responsibilities & Duties:

To fulfill its responsibilities, the Committee shall undertake the following activities, along with any other tasks it deems necessary or appropriate:

1. Establishing and Periodically Reviewing TIVA Threshold Targets:
2. • Define strategic objectives, targets, and key performance indicators (KPIs) relating to TIVA thresholds.
   • Set specific portfolio targets to align with Africa TIVA goals, including:

• • • TIVA threshold ratios and absolute targets.
    • Specific annual targets investments relating to low-income and least-developed countries.

2. Guidance on Strategic Green Industrial Infrastructure Investments in EMDEs:

• • Review and recommend business plans, budgets, and results in relation to the institution’s strategic priorities and TIVA threshold targets.
  • Engage actively with management to ensure that corporate performance indicators, instruments, and incentives align with the institution’s objectives on TIVA thresholds and scope 3 decarbonization (covering direct and indirect emissions).

3. Monitoring Performance Against TIVA Targets:

1. • Periodically review management’s performance against TIVA targets based on quarterly reports.
   • Evaluate occasional management reports on special topics or strategic themes related to TIVA thresholds and green industrial infrastructure investment trends and opportunities and provide feedback.

Meetings:

The Committee shall meet as often as necessary, but no less than once per quarter, to effectively carry out its responsibilities.

Ends

Africa investor (Ai) today confirmed that Dr. Hubert Danso, its CEO and Chairman, and the Chairman of the African Union’s Continental Business Network (CBN), the African Green Infrastructure Investment Bank (AfGIIB) and Co-Chair of the Sustainable Markets Initiative (SMI) Africa Council, sat down for an exclusive interview with ARC Ratings to discuss the Global Emerging Markets Risk Database (GEMs), its future and the importance of institutional investor-public partnerships (IIPPs).

In this wide-ranging interview from ARC Ratings offices in Canary Wharf, London, Africa investor’s Dr. Hubert Danso tells the ARC Ratings that the GEMs Consortium of Multilateral Development Banks (MDBs) must without further delay democratize full investor access to GEMs data and fully implement GEMs2.0, as mandated by G20 Heads of State as their sovereign shareholders, to establish GEMs as a separate operational entity to democratize access to GEMs data for investors and credit rating agencies, to improve transparency and assist mobilize private capital at-scale and speed, for emerging markets and developing economies (EMDEs) sustainable development investment opportunities.

To support and mobilize the trillions for the critical just energy transition in EMDEs, global and domestic asset owners are proactively driving the evolution of GEMs so that it is accessible to investors to use for accurate risk assessment and to responsibly diligence opportunities to scale investment allocations to EMDEs.

To achieve this, Africa investor (Ai), ARC, and global investors have formed an institutional investor-public partnership (IIPP) platform to not only ensure GEMs2.0 disclosure is delivered but to expand it with new inputs from the investment community and rating agencies towards GEMS3.0—an asset allocation tool that supports the alignment of institutional investment allocations at-scale, with EMDEs Paris Agreement and Sustainable Development Goals (SDGs).

View the full interview here

Useful links:
Introducing GEMs3.0 at New Financial Pact Summit: Hidden GEMS – The Global Emerging Markets Database by Dr. Hubert Danso 
Africa investor announces GEMs3.0 at COP28 Finance Day in Dubai 
Funding Vital Emerging and Developing Market Projects: How GEMS and Private Markets Can Help Achieve Scale – ARC Ratings
Bankers Push World Bank to Unlock Secret Data For Climate Loans: Bankers Push World Bank to Unlock Secret Data For Climate Loans
Unlock our Hidden Gems: Costs to Developing Countries of MDBs not democratising investor access to GEMS 

In today’s rapidly evolving multipolar global economy, industrialized countries face a critical decision on how to harness the multipolarity in global trade, to reimagine the balance of trade policies: Either continue to rely on traditional export revenues or pivot to a multipolarism geopolitical model that prioritizes investments in Emerging Markets (EMs) with a focus on climate transition resources.

by adopting this new multipolarism model, where regional alliances and sovereign economic interests collaborate to meet each other’s development and finance needs instead of competing,  industrialized nations can secure competitive investment returns while positioning themselves to capitalize on the burgeoning $10 trillion per annum global green industrial economy. Here’s the investment case for making this strategic shift.

Here’s the investment case for making this strategic shift.

1. Capitalizing on the Growing Green Economy Market Growth Potential

The global green industrial economy is expanding at an unprecedented rate, estimated to reach $10 trillion annually. By investing in EMs’ climate transition projects, industrialized countries can tap into this lucrative market, positioning themselves as leaders in green technology and sustainable development.

Premium Pricing for Green Products: Products and services emerging from green investments can be sold at a premium. Consumers and businesses are increasingly willing to pay more for sustainable and environmentally friendly products, providing higher margins and enhanced profitability.

2. Competitive Investment Returns

Higher Returns in Emerging Markets: Emerging markets offer higher growth potential compared to mature markets. Investments in renewable energy, sustainable infrastructure, and climate adaptation projects in EMs can yield competitive returns, outpacing those from traditional export revenues.

Risk Mitigation Through Diversification: By diversifying investments across various EMs, industrialized countries can mitigate risks associated with single-market dependencies. This approach spreads risk and enhances the stability of investment portfolios.

3. Driving Technological Innovation

Accelerating Green Technology Development: Investing in climate transition resources in EMs spurs technological innovation. Industrialized countries can lead the development and deployment of cutting-edge green technologies, which can then be marketed globally.

First-Mover Advantage: Early investments in green industrial projects position countries as pioneers in sustainable technology, securing long-term competitive advantages in the global market.

4. Strategic Geopolitical Benefits

Strengthening Global Alliances: By supporting EMs in their climate transition efforts, industrialized countries can build stronger geopolitical alliances, fostering cooperation and stability. These partnerships can lead to favorable trade agreements and enhanced diplomatic relations.

Soft Power and Global Leadership: Leading the charge in global climate initiatives enhances a country’s soft power. It positions industrialized nations as responsible and forward-thinking global leaders committed to sustainable development.

5. Enhancing Domestic Economic Resilience

Job Creation in New Sectors: Transitioning to a green investment model creates jobs in emerging industries such as renewable energy, sustainable infrastructure, and green technology. This can offset job losses in traditional export sectors.

Economic Diversification:Investing in green projects abroad and developing corresponding industries domestically reduces reliance on traditional exports. This diversification strengthens economic resilience against global market fluctuations.

6. Meeting Global Climate Goals

Addressing Climate Change: Industrialized countries have a critical role in combating climate change. By investing in EMs’ climate transition projects, they contribute significantly to global emission reduction goals, aligning with international climate agreements and enhancing their environmental credentials.

Corporate Social Responsibility: Companies in industrialized nations can bolster their corporate social responsibility profiles by supporting sustainable development initiatives, and attracting environmentally conscious investors and consumers.

Implementation Strategies

Institutional Investor-Public Partnerships (IIPPs): Collaborative Projects where Governments, Universal Owners, and private sector portfolio companies, jointly fund and manage industrial climate transition projects in EMs, sharing risks and rewards.

Risk Mitigation: Align co-investments with African asset owners and strategic at-scale long-duration, bankable offtake and blended investment alliances, with initiatives such as the Inflation Reduction Act, African Growth and Opportunity Act (AGOA), the EU Green Deal’s Value Addition Partnerships and bankable long duration global corporate commitments for green technologies to mitigate historical barriers to global market access, foreign exchange, and political risks associated with investing in African markets.

Utilize instruments like guarantees, and insurance to protect investments against political and economic risks in EMs.

Employ the world-class Institutional Investor-Public Partnership (IIPP) framework, to safeguard investments.

Green Bonds and Climate Investment Funds

Innovative Financing: Leverage green bonds and dedicated climate funds to finance sustainable projects in EMs, providing a steady stream of capital for green investments.

Blended Investments: Combine public and private investment to enhance the scale and impact of climate transition projects.

Policy Support and Incentives

Regulatory Frameworks: Develop supportive regulatory frameworks that encourage green investments and ensure fair market conditions for green industrial cities and long duration bankable offtakes agreements for green technologies.

Tax Incentives: Offer tax breaks and other incentives for companies investing in NDC and green industrial infrastructure investment projects in Africa, especially those in Green Industrial Cities.

Capacity Building and Technical Assistance

Training Programs: Implement training programs to build local capacity and ensure the effective implementation and management of green industrial projects.

Technical Support: Provide technical expertise to help Africa develop robust and scalable climate transition and NDC industrial scale projects.

Comparing import revenues to investment returns (prospects and dynamics)

Investment Returns

1. Rate of Return:
   • Green Investments: Investments in green technologies and infrastructure tend to have attractive long-term returns. Renewable energy projects, for example, can offer returns ranging from 5% to 10% or more annually.
   • Emerging Markets: Investments in Emerging Markets generally come with higher potential returns, often in the range of 10% to 20% annually, depending on the sector and market conditions.

2. Compound Growth:
   • Compound Interest: Over decades, compound growth significantly boosts the value of initial investments. For instance, a 10% annual return on a $1 trillion investment could grow to approximately $2.59 trillion over 10 years, and around $6.73 trillion over 20 years.

3. Diversification:
   • Risk Mitigation: Diversifying investments across various green technologies and regions can help mitigate risks and ensure more stable returns.

Import Revenues

1. Export Revenues vs. Import Costs:
   • Traditional Model: In a traditional export-driven model, revenues are generated from selling industrial goods to Emerging Markets. These revenues are typically subject to market fluctuations, competition, and trade policies.
   • Premium Pricing: If industrialized countries can command premium prices for advanced green technologies, the revenue per unit sold could be higher, but total revenue would still depend on market size and demand.

2. Market Size and Growth:
   • Global Green Economy: The global green economy, projected to reach $10 trillion annually, represents a significant market. Capturing even a fraction of this market through premium pricing can lead to substantial revenues.
   • Export Revenue Potential: If industrialized countries capture 5% of this market with premium products, annual revenues could be around $500 billion. Over a decade, this could amount to $5 trillion, assuming consistent growth and market share.

Comparative Analysis

1. Investment Returns:
   • High Potential: Assuming an average annual return of 10%, a $1 trillion investment could yield approximately $1.59 trillion in returns over 10 years, and $5.73 trillion over 20 years.
   • Impact of Scale: For larger investments, say $3 trillion, the returns could be $4.77 trillion over 10 years and $17.19 trillion over 20 years, highlighting the power of compounding.

2. Import Revenue:
   • Steady Flow: Import revenues from selling industrial products might provide a more consistent revenue stream, but may not grow as rapidly due to market saturation and competition.
   • Market Dynamics: Factors like trade barriers, geopolitical tensions, and economic cycles can affect import revenues more directly than diversified investment returns.

Investing for a Sustainable Future

While both import revenues and investment returns have their merits, long-term investments in Emerging Markets’ green transitions offer potentially higher and more sustainable returns. The compounding effect of investment returns over decades can significantly outweigh the steady but potentially lower growth of import revenues.

• Investments in the hundreds of billions to trillions: With high rates of return, these investments can substantially grow over time, providing robust financial gains.
• Import revenues: Though they provide a steady income stream, they are more vulnerable to market conditions and might not scale as dramatically as investment returns.

Thus, from a strategic perspective, prioritizing investments in green technologies and infrastructure in emerging markets could yield higher overall returns than relying solely on import revenues from industrial product sales.

In Conclusion

Adopting a multipolarism geopolitical industrial trade policy that prioritizes climate investments in EM’s over immediate export revenue benefits offers a compelling strategic investment case for industrialized countries.

Mulitpolarism not only yields competitive returns and capitalizes on the $10trn per annum and growing expanding global green industrial economy, but also drives technological innovation, strengthens geopolitical alliances, and enhances domestic economic resilience.

By leading on multipolarism-led green industrial policy, industrialized nations can secure their economic future, address the just energy transition, and arrest global climate challenges while demonstrating leadership commitment to a more equitable and sustainable world.