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Boosting Agricultural Growth: AfDB Approves $10 Million AGIA Project Development Fund

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Boosting Agricultural Growth: AfDB Approves $10 Million AGIA Project Development Fund

The Board of Directors of the African Development Bank Group approved the proposal to take an initial stake of up to US$10million in the ‘Alliance for Green Infrastructure in Africa – Project Development’ (AGIA-PD) fund in Abidjan on 24 January 2024.

Part of the Alliance for Green Infrastructure in Africa (AGIA), a US$10billion initiative led by the bank and formed jointly with the African Union Commission, the pan-African investment platform Africa50 and several other partners, the AGIA-PD seeks to help accelerate the continent’s green transition by collaborating with African countries and the private sector, internationally and locally, to prepare and develop resilient, transformative green infrastructure projects and programmes quickly and at scale.

The AGIA will be implemented through three pillars: first, project preparation seeking to raise US$100million in donations upstream for targeted activities; second, project development using the AGIA-PD mechanism to raise US$400million in blended capital to transform green infrastructure project concepts into bankable opportunities; and third, investment and finance that involves establishing a framework to facilitate the mobilisation of US$10billion in funding — from treasury stocks, loans and risk mitigation instruments — to provide large-scale funding for green infrastructure projects prepared and developed under pillars one and two.

The AGIA-PD fund will run for 15 years and should reach its capitalisation target in three years. Its blended capital structure combines donations and first- and second-rank treasury stocks for a total of US$400million. In December 2023, at COP 28 in Dubai, some US$175million in commitments were announced, which included a potential contribution of US$40million from the African Development Bank and a commercial investment of US$10million approved by the bank’s Board of Directors for a current total of around US$215million.

The AGIA-PD targets investors including multilateral development banks, impact funds, governmental organisations, sovereign funds, regional and non-regional institutional investors, commercial investors and philanthropists.

“The AGIA-PD is a strategic investment, co-managed by the bank, to transform concepts into bankable green infrastructure projects quickly and at scale. It will invest in the development of green infrastructure projects to produce a financial yield and to have an impact on development. It will seek support from the private sector to develop transformative, green, resilient projects that will fill Africa’s infrastructure gap for the long term,” stated Solomon Quaynor, Vice President of the African Development Bank Group with responsibility for the Private Sector, Infrastructure and Industrialisation.

“The AGIA’s vision is to speed up the deployment of transformative green infrastructure projects by creating a robust partnership between the different actors and targeting the entire green infrastructure project preparation, development and funding ecosystem, working with both emerging and established actors. The ultimate objective is to accelerate the continent’s green transition, while drastically reducing the shortage of infrastructure,” explained Amadou Hott, special envoy to the President of the African Development Bank Group, Akinwumi Adesina, and global ambassador for the AGIA.

The AGIA-PD target sectors and investments in climate change mitigation projects are aligned with the beneficiary countries’ nationally determined contributions and with the bank’s High 5 Strategic Priorities — ‘Light Up and Power Africa’, ‘Feed Africa’, ‘Industrialize Africa’, ‘Integrate Africa’ and ‘Improve the Quality of Life for the People of Africa’ — and with the bank’s Climate Change and Green Growth Strategic Framework 2021-2030.

Source: Joy News

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