AfDB steps up bid to make Africa’s construction boom green at COP 27

The African Development Bank is looking to spend hundreds of millions of dollars to help green the continent’s infrastructure boom amid rapid population growth and demand for housing.

Steve Umidha, bird story agency

The African Development Bank’s (AfDB) infrastructure fund, Africa50, has set its sights on ramping up investments to green the continent’s construction boom amid soaring demand for housing.

The fund, set up to bridge the continent’s infrastructure finance gap, has now committed itself to spur sustainable building in African countries, with an initial US$500 million to be pooled from wealth funds.

Speaking on the sidelines of COP27 in Sharm-el-Sheikh, Egypt, Alain Ebobissé, Africa50’s Chief Executive Officer, said the programme will be Africa-led, with the money to be invested in climate-friendly developments in the power and energy sectors.

Alain Ebobissé, the Chief executive officer (CEO) of Africa50 at COP27 in Sharm El Sheikh, Friday, November 9, 2022. The event has been heralded as "Africa's COP" . (Photo : Seth Onyango, bird story agency)

“This is an African-led initiative, where we are bringing regional and global partners to work with us, but the agenda is set by Africans,” said Ebobissé, a pan-Africanist and experienced infrastructure sector expert. “We are looking at investing in the African private sector.”

He explained that a third of the multi-million-dollar kitty would be offered to global investors keen to develop infrastructure projects on the continent. The remaining two-thirds will be extended to African institutions and private sector players interested in similar infrastructure projects.

Alain Ebobissé, the Chief executive officer (CEO) of Africa50 at COP27 in Sharm El Sheikh, Friday, November 9, 2022. The event has been heralded as "Africa's COP" . (Photo : Seth Onyango, bird story agency)

Partnership discussions are underway between Africa50 as the fund’s driver and bodies, including the African Union Commission and Africa’s sovereign wealth funds, among others.

Though he would not offer specific timelines, Ebobissé said he was confident that the preliminary penning of tangible deals would occur “in the coming months”: “This is a changing narrative that we are talking about, but the agenda is set by us…we are, however, still working on fundraising but we are moving fast, but I am saying in a few months we will have a financial close for the initiative and then we can start spending the money.”

Africa50 was set up in October 2021 by a consortium of African governments and the AfDB to help bridge the continent’s infrastructure funding gap. Its mandate, Ebobissé explained, is essentially to deliver attractive risk-adjusted returns for institutional investors looking for exposure to African infrastructure assets while playing a critical role in financing medium and large-scale infrastructure projects in Africa.

It seeks to mobilise public and private sector finance and invest in infrastructure projects like transport and logistics, water and sanitation, and digital and social infrastructure.

This focus is in keeping with global economy trends: US$90 trillion is set to be invested in sustainable infrastructure by 2030, according to estimates by the Global Commission on the Economy and Climate’s flagship New Climate Economy project.

The funds will be channelled to initiatives that bolster green economic growth in several markets, most in Africa.

Such sustainable infrastructure comes with specific requirements for investors: buildings must be fitted with solar panels, for example, and must be constructed using environmentally friendly concrete.

Experts believe this infrastructure will bring many advantages – for instance, green roofs and tree-planting initiatives tied to sustainable construction projects could help reduce the urban heat island effect.

bird story agency