(MENAFN- Khaleej Times) A finance initiative will provide $4.5 billion (Dh16.5 billion) to help unlock Africa's clean energy potential, as well as solve the continent's critical infrastructure challenges. This was announced by Dr Sultan Al Jaber, President-Designate of COP28, while speaking during a keynote address at the inaugural African Climate Summit in Nairobi, Kenya.
The new programme is led by the Abu Dhabi Fund for Development (ADFD), Etihad Credit Insurance (ECI), Masdar, AMEA Power and Africa50, an investment platform established by African governments and the Africa Development Bank.
ADFD and the ECI are kickstarting this initiative with the former supporting with $1 billion of financial assistance to address basic infrastructure needs, offer innovative finance solutions and increase the mobilisation of private investments. The ECI is providing $500 million of credit insurance to de-risk and unlock private capital – further demonstrating ECI's commitment towards global sustainable development.
Masdar is committing an additional $2 billion of equity as part of the new initiative. It will also mobilise an additional $8 billion in project finance through its Infinity Power platform and aims to deliver 10 gigawatts (GW) of clean energy capacity in Africa by 2030.
It is estimated that almost half of Africa's population still has no access to electricity, and almost 1 billion people lack clean cooking fuels.
AMEA Power is targeting 5GW of renewable energy capacity in the continent by 2030, mobilising $5 billion, of which $1 billion will come from equity commitment, and $4 billion from project finance.
Additionally, the initiative seeks to create pathways for other multilateral development banks, governments, and philanthropies to catalyse additional private sector investment. The COP28 Presidency has called for others including international financial institutions (IFIs) and foundations to join the effort to convert words into actions.
“The initiative will prioritise investments in countries across Africa with clear transition strategies, enhanced regulatory frameworks and a master plan for developing grid infrastructure that integrates supply and demand. In short, this initiative is designed to work with Africa, for Africa. And it will act as a scalable model that can be replicated to help put Africa on a superhighway to low carbon growth,” said Al Jaber.
He called on donors to close out the $100-billion pledge they made over a decade ago and to replenish the green climate fund.
The COP28 president-designate reiterated a call to make finance more available, accessible and affordable, tripling renewable energy by 2030.
During the Summit, leaders and industry executives also asked the African nations to improve their policies and regulatory frameworks to attract the long-term investments necessary to accelerate the deployment of clean and renewable energy.
Al Jaber also called for restoring the financial sustainability of local utilities, modernising basic energy infrastructures, clarifying development processes, eliminating the red tape delaying market lead-time and eliminating of restrictions to capital flows.
Fast-tracking the energy transition, fixing climate finance, focusing on people, lives and livelihoods, and underscoring these efforts with full inclusivity are the key pillars of the COP28 Presidency's Action Agenda.
The initiative will sit under the umbrella of Etihad 7, which aims to provide 100 million people across the African continent with clean electricity by 2035.
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