By Faridat Salifu
The African Development Bank (AfDB), recently made a significant move by joining the Global Green Bond Initiative (GGBI) to address the pressing need for ecological and sustainable investments.
The Global Green Bond msrket is projected at $2,200 billion but Africa’s current commitment is just $10 billion, representing a mere 1% of the global market.
In response, the AfDB has taken the initiative to align with various financial institutions worldwide in a collective effort to boost sustainable growth.
Joining forces with esteemed partners such as the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), and others, the AfDB aims to catalyze private capital inflows into climate and environmental projects.
The mechanism includes the provision of technical assistance to green bond issuers, as well as the creation of a de-risked fund to attract private investors specifically for emerging markets and developing economies (EMDEs).
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With the goal of raising up to €20 billion in green investments, the international coalition also plans to provide technical assistance to countries, particularly in Africa, in identifying green project reserves and enhancing the capacity of economic players.
One key focus area for the AfDB’s operations in Africa is agriculture, given that the continent, despite accounting for 65% of the world’s arable land, has 283 million people suffering from hunger.
Addressing food security, which is the second Sustainable Development Goal (SDG2), is identified as a top priority for the AfDB.
In a landmark move towards sustainable development financing, the AfDB recently issued its first green bond in African currency, totaling 19 billion Ugandan shillings ($5 million).
This bond aims to make substantial investments between now and 2025 in climate-resilient value chains and the advancement of agricultural technologies such as sensors, lasers, and drones.
With these strategic initiatives and partnerships, the AfDB is actively working towards catalyzing green investments and fostering sustainable development across the continent and beyond.
