Africa’s share of global green bonds issued in 2021 is 0.26% – AfDB

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Akinwumi Adesina


dr. Akinwumi Adesina, the president of African Development Bank (AfDB) The group said Africa’s share of global green bonds issued in 2021 is 0.26%.

He said this during a speech at the COP 27 launch of the Alliance for Green Infrastructure in Africa (AGIA). AGIA is a new platform created to accelerate the development of green infrastructure in Africa in our collective drive towards net zero emissions. The alliance for green infrastructure was established by the AfDB and the Africa50 together with the African Union Development Agency, the European Investment Bank, the European Bank for Reconstruction and Development, and the Rockefeller Foundation.

In February 2022, the AfDB Office has partnered that in collaboration with Africa50, the African Union Commission, and the African Union Development Agency, it explores collaboration with global partners to create an Alliance for Green Infrastructure in Africa.

The poor part of Africa: During his speech at the launch of COP 27, Dr. Adesina said green infrastructure is very limited in Africa and this is reflected in the African side when it comes to green infrastructure bonds globally. Out of $522 billion in green bonds from 2007 to 2018, Africa accounted for only $2 billion, which is about 0.4%. In 2021, $623 billion of green bonds were issued globally, and Africa’s share was 0.26%, the lowest share of any region in the world. The same can be said in terms of green loans, Africa’s share is 1.9%. Meanwhile, in terms of global issuance of sustainability bonds and sustainability-linked loans and bonds, Africa’s share is 1%.

Price payment: In June 2022, Jean-Paul Adam, the director, Technology, Climate Change, and Natural Resources Management Division of the United Nations Economic Commission for Africa (UNECA), noticed that Africa has low private sector investment and a high cost of capital to invest in green, sustainable, or social sectors. He highlighted the fact that while Africa accounts for 23% of official climate finance, it accounts for less than 1% of global green bond issuances and pays twice as much as similarly rated peers to -access markets.

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At the launch of AGIA, Dr. Adesina also spoke about AGIA’s focus, which is to develop low-carbon climate-resilient infrastructure for Africa. According to Dr. Adesina, AGIA was established to:

  • Close the infrastructure financing gap in Africa
  • Building sustainable and resilient infrastructure for Africa
  • Mobilize African investors and global institutions to invest in quality, green infrastructure
  • Accelerate the scale needed to accelerate Africa’s transition to net zero
  • Mobilizing private sector capital at scale to support infrastructure greening in Africa

Infrastructure financing gap: Dr. clarified. Adesina that only by working with partners and investors can Africa make transformative impacts and put the continent on a clear path to achieving net zero emissions and mitigation change. in the climate. Africa needs infrastructure financing estimated at $130 to $170 billion a year with an infrastructure financing gap of up to $108 billion a year. Much of the infrastructure for Africa has not yet been built, and this presents a great opportunity to improve it. Emphasis should be placed on building climate-smart and climate-resilient green infrastructure in Africa.

How to achieve this: Dr. told Adesina the attendees that globally, there are $103 trillion dollars in assets under management and if Africa gets 0.03 to 0.04% of that number, the continent will literally close all infrastructure financing gaps. He said AGIA will use its resources to green the existing brown infrastructure in Africa – converting heavy fuel and diesel plants to gas hybrid and power industries, greening in non-power infrastructure especially in Africa’s transportation systems using compressed natural gas, capturing flared gas and converting it to liquefied petroleum gas, which is needed for cooking, gas-to-power and manufacturing of fertilizers.

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Why this is important: As Adesina emphasized, the shift to accelerate the development of green infrastructure will open up more opportunities for the launch of more green bonds and an influx of institutional investors who are more driven by environmental, social, and governance (ESG) in their investment decisions.

  • By focusing on the development of green infrastructure, Africa can increase its share of green bonds that account for almost 2.5% of the world, aggregating at least $14 billion in green finance to boost green infrastructure in Africa.

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