On July 2nd 2020, Agence Française de Développement (AFD) and the African Export-Import Bank (AfreximBank) have announced a new facility agreement for a EUR 150 Million financing program 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 commence 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% every year (around USD 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.”
Source: Afreximbank (Published August 19, 2020)