The Africa Finance Corporation (AFC) has disclosed that it recently signed an Accreditation Master Agreement (AMA) with the Green Climate Fund (GCF) in Seoul, South Korea. Having received its accreditation in 2015, AFC is one of the first African development finance institution to sign such an agreement.
Established in 2010 by the 194 countries founder members of the United National Framework Convention on Climate Change (UNFCCC), the GCF launched its initial resource mobilisation in 2014, which rapidly gathered pledges worth US$10.3 billion.
Following the signing of the AMA, AFC according to a statement, would have access to direct funding from GCF, rather than through intermediaries or third parties.
The statement explained that over time, the GCF was expected to become the main multilateral financing mechanism to support climate action in developing countries.
â€œAFC intends to leverage this partnership by mobilising GCFâ€™s capital to further its low carbon emission investments in four of its five focus sectors: power, transport, heavy industries and telecoms.
â€œTo date, AFC has demonstrated a longstanding commitment to financing green energy in Africa through its early investment in the 26MW award winning Cabeolica wind farm in Cape Verde, the first commercial wind farm in sub-Saharan Africa. AFC is also currently developing more than 500MW of renewable power projects across the continent,â€ the statement added.
Commenting on the partnership, the Chief Investment Officer of AFC, Oliver Andrews, said: â€œThe consequences of climate change impact may have serious implications for the successful development of Africaâ€™s economy. AFC is therefore highly committed to this partnership with GFC. Not only does AFC and the GCF have shared goals, we also have shared values.
â€œFor example, AFC is committed to investing in post-conflict countries and those that face structural developmental challenges. Equally, the GCF also priorities societies that are highly vulnerable, in particular the Least Developed Countries (LDCs). As AFC is also driven by a belief in sustainable economic growth, in every sense this synergy is an excellent recipe for success.â€
Also, the Director of GCFâ€™s Country Programming Division, Pa OusmanJarju said: â€œAFC is well placed to support African entrepreneurs and explore the vast potential for economic growth across the continent in ways that do not harm the global environment.â€