The Green Climate Fund (GCF), a USD12bn international climate finance facility, has committed USD253.7m to Africa for supporting infrastructure that can withstand the impact of global warming, as reported by Bloomberg on March 21. The funding will serve as an anchor investment in the Infrastructure Climate Resilient Fund, which was launched by AFC Capital Partners, an asset management unit of Nigeria’s Africa Finance Corporation (AFC). According to AFC Capital, the climate-focused fund will create a new asset class of resilient infrastructure debt. It also emphasized the need to transform the way infrastructure is planned, constructed, and incorporates climate science.

AFC is intended to tap the new resilient bonds market to aid Africa in tackling the extreme effects of climate change. Consultants to AFC have estimated that Africa requires USD2.3tr to build the pipeline of climate-resilient infrastructure, with USD715bn worth of projects already under construction and a funding gap of around USD1.5tr. AFC aims to raise between USD400m and USD500m for the infrastructure fund this year and ultimately a total of USD750m, including investments from African pension funds and sovereign wealth funds. The infrastructure fund will initially target investments in 19 African countries across the continent, supporting initiatives including electricity transmission lines that can withstand extreme weather as they transport power from renewable energy plants, ports that handle rising sea levels, and telecommunications infrastructure that can withstand extreme weather. 

Sources:

https://www.bloomberg.com/news/articles/2023-03-21/african-infrastructure-gets-boost-from-12-billion-climate-fund?srnd=green

https://reliefweb.int/report/world/new-platform-boost-environmental-impact-financing-africa