Africa Finance Corporation (AFC) has signed an Accreditation Master Agreement (AMA) with the Green Climate Fund (GCF) in Seoul, South Korea.
Having received its accreditation in 2015, AFC is one of the first African development finance institutions to sign such an agreement.
Established in 2010 by the 194 countries founder members of the United National Framework Convention on Climate Change (UNFCCC), the GCF launched its initial resource mobilization in 2014, which rapidly gathered pledges worth US$10.3 billion.
Following the signing of the AMA, AFC will have access to direct funding from GCF, rather than through intermediaries or third parties. Over time, the GCF is expected to become the main multilateral financing mechanism to support climate action in developing countries.
AFC intends to leverage this partnership by mobilizing GCF’s capital to further its low carbon emission investments in four of its five focus sectors: power, transport, heavy industries and telecoms.
To date, AFC has demonstrated a longstanding commitment to financing green energy in Africa through its early investment in the 26MW award winning Cabeolica wind farm in Cape Verde, the first commercial wind farm in sub-Saharan Africa. AFC is also currently developing more than 500MW of renewable power projects across the continent.
Oliver Andrews, CIO of AFC, said: “The consequences of climate change impact may have serious implications for the successful development of Africa’s economy. AFC is therefore highly committed to this partnership with GFC. Not only does AFC and the GCF have shared goals, we also have shared values.”
For example, AFC is committed to investing in post-conflict countries and those that face structural developmental challenges. Equally, the GCF also priorities societies that are highly vulnerable, in particular the Least Developed Countries (LDCs). As AFC is also driven by a belief in sustainable economic growth, in every sense this synergy is an excellent recipe for success.”
Pa Ousman Jarju, Director of GCF’s Country Programming Division, said: “AFC is well placed to support African entrepreneurs and explore the vast potential for economic growth across the continent in ways that do not harm the global environment. ”
GCF activities are therefore aligned with the priorities of developing countries through the principle of country ownership. With the strategic injection of capital, African companies could one day lead the way in generating non-polluting energy for industry and local communities,” he added.
Source: Asoko Insight