By David Njagi
In a move seen to coincide with the UN’s latest push for private sector involvement in Africa’s green agenda, some USD 153 million are lined up to support the continent’s reach for innovative technologies that mitigate the effects of climate change.
Through private equity, the International Finance Corporation (IFC) has pledged USD 75 million while the UK government has approved USD 78.5 million from the UK’s International Climate Fund to boost Africa’s efforts in environmental conservation.
Announcing the new stream of funding mid February, officials from IFC’s Climate Catalyst Fund said the institution has partnered with the UK government to inject capital into African firms that have an inclination towards delivering low emission products and services.
Branded as the Climate Public-Private Partnership (CP3), the initiative is expected to work with veteran as well as budding private equity fund managers to develop technologies that are particularly focused on renewable energy, according to Lars Thunnel, IFC executive vice president.
“The growing trend by governments to bring back protectionism due to the shocks of global recessions has also made us to innovatively engage the private sector in Africa because climate change affects us all,” says Thunnel.
Experts from the UN are seen to support venture capital in pulling Africa from the grip of climate change, although they insist on development of smart government policies.
While marking the Africa launch of the United Nations 2012 International Year of Sustainable Energy for All at UNEP headquarters in Nairobi, (Tuesday), experts said investment in Africa will be key in doubling the rate of improvement in energy efficiency by 2030.
Details of how the private sector can stimulate growth in Africa are captured in a report released on the same day Financing Renewable Energy in Developing Countries: Drivers and Barriers for Private Finance in sub-Saharan Africa.
It outlines the importance of Africa’s renewable resources, with Kenya Cape Verde, Madagascar, Sudan and Chad, being of strategic significance.
Officials from the African Development Bank Group hinted about the possibility of working with the (CP3), although this would be on a synergy basis.
The Global Environment Fund (GEF) has also announced interest in private equity focusing on sustainable forestry within East, South, and some countries in West Africa.
Kenya’s Ministry of Environment and Mineral Resources (MEMR) confirms that about USD 209 million earmarked for the GEF Africa Sustainable Forestry Fund which targets sub-Saharan Africa countries has been pooled.
“We are now waiting for the final transactions from the GEF as we sort out the private equity firms we are going to work with through this facility,” says MEMR permanent secretary, Ali D. Mohamed.
Presently, some 38 institutions, mostly from the private sector, are all involved in energy infrastructure finance in developing countries, according to UNEP.