Macron Summit Calls for African pension and sovereign wealth fund co-investments through the African Green Infrastructure Investment Bank (AfGIIB)

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The New Financial Pact Summit private sector recommendations called for African collaborative pension fund and sovereign wealth fund investments at scale, through the African Green Infrastructure Investment Bank (AfGIIB), to counter the Multilateral Development Banks’ (MDBs) private capital mobilization market failure in Africa.

According to the G20, Multilateral Development Banks are supposed to mobilize $10 of private capital for every $1 of MDB finance provided. The G20 reports that the actual MDB private capital mobilization delivered is on average 20-38cents of private capital mobilized for every $1 of MDB finance.

The African Green Infrastructure Investment Bank (AfGIIB) is a global investment platform, convened and supported by the African Union, and led by African institutional investors, to catalyze private capital for Africa’s green transition.

Africa’s green finance market is sub-optimal, fragmented, Multilateral Development Bank (MDB) dominated, and lacks a purely green institutional investment platform to mobilise private capital at scale.

Africa needs to mobilise $3trn of private investment for its Nationally Determined Contribution investment projects (NDCs) by 2030, while the world only mobilised $2.8trn in the last 20 years (from 2000-2020). This means Africa needs to urgently mobilise more institutional investment in the next 7 years than the world mobilised in the last 20 years – and only 2% of that $2.8 trillion came to Africa, despite its outsized renewable energy comparative advantages.

The AfGIIB is an investor in, and Manager of, African Green Infrastructure Assets, with a particular focus on co-developing and investing in both public and privately originated bankable African NDC projects. AfGIIB works to mobilise other private sector capital, crowding-in additional finance, not displacing other investors.

The New Financial Pact recommendation(s) under the theme ‘the need to mobilize funds for climate finance’ stated as a key action; ‘Incentivize African collaborative pension fund and sovereign wealth fund investments at scale, through the African Green Infrastructure Investment Bank’.

The New Financial Pact Summit, championed and hosted by the President of France, H. E. Emmanuel Macron, convened Heads of State and Government, Heads of Multilateral Development Banks (MDBs), Heads of International Organizations, and hundreds of civil society private sector and investment leaders, to transform the world’s financial system through the curation of a new financial pact, which equitably redefines the mandates of Multilateral Development Banks (MDBs) to better deliver the mobilisation of private climate capital at scale, green infrastructure and finance solutions related to debt for emerging markets and developing counties (EMDCs).

Speaking at the Summit on the recommendation, Dr Hubert Danso, CEO and Chairman of Africa investor (Ai) Group and Member of President Macron’s Private Sector Task Force, welcomed the recommendation for African collaborative pension fund and sovereign wealth fund investments at scale, through the African Green Infrastructure Investment Bank (AfGIIB). Stating that, “Africa’s outsized human and super natural capital, green industrial cities initiative, and unparalleled green mineral wealth endowment, critical for the world’s $10trn per annum and growing global green industrial economy and decarbonization, presents AfGIIB’s institutional investors with the global investment opportunity of our lifetime, to establish African green and industrial infrastructure as a globally competitive investable asset class.”

Dr Danso went on to say, “As the largest consortium of African and global institutional investors representing over $20trn of assets under management and advisement, AfGIIB is committed to innovation, by building and strengthening the African Green infrastructure investment Market instead of simply serving it, and making mobilizing private capital at scale for African NDC’s the expectation not the exception”.

Africa’s green industrial cities,  which are innovative special purpose destinations, build on the African Union’s $4.6trn African Continental Free Trade Area’s (AfCFTA) goal, to de-risk and leapfrog to investable, resilient and globally competitive green supply chain and industrial infrastructure, and will be the cornerstone to assist Africa in increasing its share of the $10trn per annum and growing global green industrial economy, and accelerating institutional investor-public partnerships at scale, to deliver a risk and climate adjusted Just Energy future and return for AfGIIB investors, Africa and the world.

Heads of State and investment leaders will advance implementation of the recommendations at The New Financial Pact Summit agenda at the Africa Climate Action Summit, championed by the President of Kenya H.E. President William Ruto, which will be hosted by the government of Kenya in Nairobi Kenya on the 4th-6th of September 2023 on the road to COP28 in the UAE.

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