Agence Française de Développement and AfreximBank sign a €150 million climate financing agreement for Africa
Agence Française de Développement (AFD) and the African Export-Import Bank, AfreximBank, have announced a new facility agreement for a €150 Million financing programme to 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.
As part of its financing program, AFD has made available a EUR 500,000 grant to carry out a technical assistance program which will support Afreximbank in developing its sustainable finance strategy. By doing so, this strong partnership between the two institutions will promote through Afreximbank and its partnering institutions, the dissemination of innovative financing mechanisms for the sustainable development of the African continent.
As the continent commences the implementation of the African Continental Free Trade Agreement (AfCFTA) early next year, it is timely to unlock new funding arrangements to finance sustainable projects and sectors that build Africa’s long-term competitiveness and resilience. It is estimated that the climate change is impacting negatively on Africa’s GDP by 2.8 per cent every year, around $100 billion.
In order to tackle the 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.
To this end, making financing available for climate finance and sustainable development in Africa is considered a priority by both institutions.
Against this backdrop, accelerating investments in key channels for climate and pandemic resilience in the continent is a top priority for Afreximbank: ensure food security by strengthening agricultural value chains, increase access to water and sanitation, improvement of living conditions of people, job creation through investments in resilient infrastructure, ensure the availability of affordable and sustainable source of energy for all, support the creation of world class medical facilities and pharmaceutical industries, are some of the main development challenges to tackle ahead.
The new partnership signed on July 2nd, 2020, between AFD and Afreximbank aims at contributing to the development of such solutions.
The agreements were signed by the Executive Vice-President of the African Export-Import Bank, Mr. Amr Kamel, with Dr. Fabio Grazi, Director of AFD Country Office for Egypt.
Speaking during the signing ceremony, Amr Kamel, Executive Vice President, Business Development and Corporate Banking at Afreximbank, said that the facility signed with AFD 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 in their pursuit of infrastructure investments and will sustain their social and economic development.”
On the occasion of the signing, Dr. Fabio Grazi indicated that “Today's agreement reaffirms AFD’s and Afreximbank’s commitment to propel the strategic partnership between our 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 realize the opportunities available for the African continent.”
Since 2015, the relationship between AFD and Afreximbank grew and gradually turned into a partnership based on a community of objectives and interests for the sustainable development of the African economy.
As a whole, the partnership between AFD and Afreximbank amount up to EUR 450 M. First, the partnership was focusing on promoting the competitiveness and diversification of African exports, enhance African exports, foster the insertion of local content and the creation of value chains and regional trade integration.
Today, it is a new step in this partnership which focuses more on mainstreaming climate-friendly and social inclusive financing solutions across the continent. The next step of this partnership will be materialized at the “Finance in Common” Summit organized in November, 2020 in the context of the Paris Peace Forum (11-13 November) which will gather for the first time 450 Public Development Banks from all over the world as well as their stakeholders and partners, and to which Afreximbank will participate.
This Summit will aim at promoting synergies and partnerships between Public Development Banks (PDB) and will stress their crucial role in reconciling short-term countercyclical responses to the crisis with sustainable recovery measures that will have a long-term impact on the planet and societies.
An opportunity for the two institutions to share experience and promote their climate action on the continent.
