The President of the African Development Bank, Dr Akinwumi Adesina has said that climate-resilient infrastructure offers investment potential of between $130bn and $170bn for the African continent.
He also said that African energy transition presents a $100bn per year investment opportunity for the continent.
He said this at the European Union-Africa Green Investment Forum where he reminded global audiences of the continent’s vast opportunities for green growth.
The hybrid forum was convened by Portugal and the European Investment Bank to mobilize private and public capital towards the green transition in Africa.
The high-level event brought together leading government and business figures, international and development financial institutions, civil society and academia.
Adesina during a video address identified energy, agriculture and infrastructure as key areas of investment potential for a post-Covid-19 recovery in Africa.
With abundant solar, wind, hydro and geothermal energy resources, he said that Africa’s energy transition alone presents a $100bn per year investment opportunity, adding that agriculture potentially offers massive investments in climate-smart crops to build more resilient food systems.
While climate change is a huge challenge for Africa, Adesina urged investors to seize on the opportunities it presents, which would be worth $3trn by 2030.
He said the African Development Bank is in the vanguard of investment in climate adaptation, adding that over 70 per cent of the financing needed will come from the private sector to complement public investments.
He said, “We intend to power the entire Sahel of Africa via solar. That’s why the African Development Bank has launched the Desert to Power initiative, a $20bn initiative, to build 10,000 MW of solar power plants.
“This will become the largest solar zone in the world and provide electricity for 250 million people. Africa’s energy transition presents a $100bn per year investment opportunity.
“Enormous potential exists in agriculture. That’s because the size of the food and agribusiness market in Africa is estimated to reach $1trn by 2030.
“With 65 per cent of the world’s uncultivated arable being in Africa, it is clear that what Africa does with agriculture will determine the future of food in the world.
“That’s why the African Development Bank is investing massively in climate smart agriculture, to support the continent to adapt to climate change, and build more resilient food systems.
“The Bank’s Africa Climate Smart Agriculture is targeting 10 million farmers with climate smart agricultural technologies and practices. This will help to create 500,000 new green jobs and mobilize $1bn of climate funds.”
Adesina said Africa’s massive needs for infrastructure, from roads to rail, ports, airports, internet connectivity, water and sanitation, as well as urban housing needs, present enormous opportunities for green investments.
He explained that the size of the infrastructure opportunities is worth between $130bn and 170bn annually.
The AfDB Boss said Africa’s future infrastructure needs to be greener and climate resilient, noting that the continent must shift away from simply building the cheapest infrastructure, to investing in life cycle financing.
To drive greater private sector investment in green infrastructure, Adesina said that financial instruments are needed for project preparation, reducing risks of investments, and especially blended finance to lower the cost of capital for investors and improve project profitability and financial sustainability.
He said the European Union External Investment Plan has provided over €1bn to the African Development Bank, to support 31 project grants worth €648m; equity grants in four projects worth €97m; and six guarantees for projects worth €242m.