The African Development Bank Group launched the African Green Bank Initiative on 15th November, 2022, in Sharm el-Sheikh, Egypt, on the sidelines of COP27, a new initiative for green banks.
The new initiative will be backed by the African Green Finance Fund (AG3F) next year, which will help to structure and develop an ecosystem of local green finance mechanisms on the continent in order to increase the mobilization of climate finance.
In a report co-written by the African Development Bank (AfDB) and the Climate Investment Fund, it stated that green banks have the possibility to increase the capacity of African countries to access and mobilize the climate finance required to implement their NDCs, national climate and development goals.
According to the AfDB President, Akinwumi Adesina, he said that the establishment of a green finance ecosystem could generate $3 trillion in climate finance opportunities on the continent.
The African Green Bank Initiative will be backed up by a $1.5 billion trust fund expected to close in 2025. It is a unique framework for the African Development Bank to provide governments and financial institutions with technical and fundraising support by providing credit enhancement solutions to reduce the risks in investing in sustainable projects.
The AfDB’s objective is to encourage sustainable economic development and social progress in African countries, thereby reducing the rate of poverty.