The Africa Finance Corporation (AFC) has been accredited as a partnering Institution to the Green Climate Fund (GCF), making it the fund’s first African Development Finance Institution partner.
AFC’s full accreditation was announced by GCF earlier this month after an extensive due diligence and approval by the Board of GCF. Accreditation by the GCF enables AFC to access its committed capital of US$9.3 billion; a pool of funds for climate change projects to be utilized by partners for on-lending, grants, lines of credit, guarantees and other similar functions.
AFC intends to use the fund’s capital to further its investment in renewable energy, an important subset of power, a priority sector for the Corporation. AFC is the lead investor in the award winning Cabeolica project, a USD90 million, 26MW landmark renewable energy wind power project in Cape Verde and the first commercial scale public private partnership wind farm in Sub-Saharan Africa, which currently provides over 20% of Cape Verde’s power needs.
The GCF, with headquarters in Songdo Republic of Korea, is a fund operating within the United Nations Framework Convention on Climate Change (UNFCCC). GCF’s objective is to promote the paradigm shift towards low-emission and climate-resilient development pathways by providing support to developing countries to limit or reduce their greenhouse gas emissions and to adapt to the impacts of climate change, taking into account the needs of those developing countries particularly vulnerable to the adverse effects of climate change.
Over time, the GCF is expected to become the main multilateral financing mechanism to support climate action in developing countries. With a total of 20 accredited entities, the fund is governed by a Board of 24 members and is initially supported by an Interim Secretariat.
Andrew Alli, President & Chief Executive Officer, AFC commented on the announcement: “This is very positive news as it reinforces and supports AFC’s commitment to promoting viable renewable energy projects on the continent and demonstrates AFC’s continuing commitment to promoting better environmental and social outcomes in Africa. Through partnering with the Green Climate Fund, AFC will have access to valuable resources to support investments across a variety of green projects, making a significant contribution to the global efforts to combat climate change”.
AFC, an international investment grade multilateral finance institution, was established in 2007 with a capital base of US$1 billion, to be the catalyst for private sector infrastructure investment across Africa. With a current capital base of US$2.9 billion, AFC is now the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 (Stable outlook) rating from Moody’s Investors Service. In May 2015, AFC successfully concluded a debut US$750 million Eurobond issue which was 7x oversubscribed and attracted investors from Asia, Europe and the USA.
AFC’s investment approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth.
AFC invests in high quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications.
AFC has become the benchmark institution for private sector power project development and investment in Africa.