AFRICA – Agence Française de Développement (AFD) and the African Export-Import Bank (AfreximBank) have announced a new facility agreement for a US$177 million financing programme that will support initiatives focused on combating climate change in Africa.
The US$150 million facility will specifically support Afreximbank in the implementation of its new climate finance strategy which will target green, low carbon, socially inclusive and more resilient investments across Africa.
The agreements were signed by the Executive Vice-President of the African Export-Import Bank, Amr Kamel, while Dr Fabio Grazi, Director of AFD country office for Egypt signed on behalf of French development agency.
Speaking during the signing ceremony, Kamel said the facility was a huge opportunity for climate finance for African countries.
“It will create value from environmental assets and promote climate-friendly investments to support African governments and African companies.”
Dr Grazi on his part, noted that the agreement reaffirmed AFD’s and Afreximbank’s commitment to propel the strategic partnership between the two institutions to new heights in support of Africa’s sustainable and inclusive economic development.
“The signing of this new agreement bases upon the shared vision that mainstreaming climate change and sustainable development goals into Africa’s financial sector is critical to tackle the challenges ahead and realise the opportunities available for the African continent.”
It is estimated that climate change is impacting negatively on Africa’s GDP by 2.8% every year which amounts to a loss of about US$100 billion annually.
In order to tackle climate change challenges in Africa, financing solutions have to be developed not only through external financial flows but also through the development of specific and more appropriate instruments that fosters sustainable development.
ESI Africa notes that the AFD, AfreximBank partnership was particularly timely given that Africa was warming up towards the the implementation of the African Continental Free Trade Agreement (AfCFTA) which is expected to take effect next year.
“The funding is timely to unlock new funding arrangements to finance sustainable projects and sectors that build Africa’s long-term competitiveness and resilience,” ESI Africa said.