AfDB approves $30m for solar power plants, others

The board of directors of the African Development Bank has approved a $30 million equity investment in Africa Finance Corporation to enable AFC to finance climate action projects across Africa.

Parties in the deal said the fund would be used to develop solar power plants and energy storage systems, among others, according to a statement.

The equity investment is for the rollout of AFC’s innovative ‘green shares’ programme.

Under this initiative, the innovative financial instruments are expected to unlock significant funding for high-impact projects, including wind and solar power plants in Djibouti and Egypt and energy storage systems in Cabo Verde.

AFC will leverage the green equity and mobilise debt funding from capital markets for on-lending to sub-projects.

The investment is projected to contribute to the creation of over 1,600 full-time equivalent jobs by 2031, while also fostering regional integration, and generating clean, reliable energy to power millions of African households.

It is also expected to drive inclusive growth and expand economic opportunities for marginalised populations, including women and rural communities.

Africa faces severe climate impacts despite contributing less than three per cent of global carbon emissions and an annual infrastructure financing gap of $170bn.

The African Development Bank’s investment positions the AFC to play a key role in establishing an ecosystem of sustainable financing that will bridge these gaps to create economic opportunities and enhance Africa’s climate resilience.

African Development Bank Vice President for Private Sector, Infrastructure, and Industrialisation, Solomon Quaynor, said, “The collaboration between the African Development Bank and Africa Finance Corporation exemplifies the transformative power of strategic partnerships.

“The bank group’s first-mover investment in AFC’s green shares is expected to attract other regional and global investors, amplifying the impact of this initiative, and sending a strong signal to global investors that Africa is ready to lead the way in green growth.”

The Executive Board Member and Head of Financial Services at AFC, Banji Fehintola, added, “We are honoured to welcome the African Development Bank, Africa’s largest development finance institution, as the first investor in our Green Shares programme.

“Their $30m commitment highlights the critical role of sustainable financing in tackling Africa’s climate and infrastructure challenges while strengthening our shared mission to drive transformative change across the continent. By working with a like-minded partner who shares our vision for a prosperous and sustainable Africa, we are advancing impactful solutions that support the continent’s green transition and long-term development.”

AfDB’s Director for Financial Sector Development, Ahmed Attout, stressed that “this partnership with AFC is a major milestone in our efforts to channel domestic, regional, and global capital into projects that build climate resilience and foster sustainable growth.”