The Investment Mobilisation Collaboration Alliance (IMCA) opened a new call for proposals to finance the greening of supply chains in Africa during COP29 in Azerbaijan.
Together the U.S. Government, Denmark, Sweden and Norway have made 70 mil. USD available for competition amongst private investors to mobilize sustainable private investments into green energy transition value chains in Africa.
The International Energy Agency (IEA) has estimated that over $2 trillion in new investments is needed annually by 2030 to reduce carbon emissions while addressing growing energy demands of emerging markets and developing economies.
The energy transition is about installing renewable energy, but it should also mean opportunities for African economies – investment and job creation within the energy transition value chains e.g. producing batteries for solar parks and recycling materials for manufacturing.
This is why retaining a larger part of the value creation beyond the raw mineral extraction and export is front and center, and why IMCA has launched the Greening Value Chains in Africa (GVCA) finance window.
GVCA aims to support the greening and increased localization of Africa’s energy transition value chains while fostering sustainable economic development.
This will be achieved by using blended finance to mobilize large scale private investments in renewable energy, green technology, sustainable practices, and local capacity building throughout Africa’s energy transition value chains.
IMCA members anticipate providing at least USD $70 million of catalytic finance through GVCA. This includes grants from USAID and guarantees from Sweden, Norway, and Denmark.
GVCA is seeking proposals from experienced debt, equity, or other investors (e.g., asset managers, asset owners, financial institutions with investment or lending capabilities) to channel blended finance into green and sustainable funds or other investment vehicles.
The funding will blend with private capital to generate large scale investment funds to launch at COP31, mobilizing hundreds of millions of dollars of private capital into green value chains in Africa.
COP29 in Baku has been dubbed the “finance COP,” and international collaboration will be critical to unlocking the massive investment needed to secure a net-zero future, particularly in the developing world. The GVCA is a concrete large-scale example of how to make one dollar of donor funding mobilize several dollars of private investments in Africa.
Launched at COP28 by the United States and the Nordic governments, IMCA is a pioneering platform for establishing blended finance solutions to catalyse investments in climate mitigation, adaptation and nature across emerging markets and developing economies.
In its first year since inception, IMCA has facilitated successful pipeline information sharing between members and launched two financing windows.
The Blended Finance for Energy Transition (BFET) window facilitated pipeline transaction coordination that helped mobilize $1.4 billion in climate mitigation investments to heavily coal-dependent emerging economies.
The Adaptation Finance Window (AFW) attracted a competitive set of proposals from asset managers aiming to mobilize $500 million.
Ole Thonke, Under Secretary for Development Policy at Ministry of Foreign Affairs of Denmark, said at the meeting that “by joining forces and joining funds from all of us we achieve a scale that brings the big private developers to the table and make it worth it for them to start building out the green business cases in Africa on their calculators.”
The World Climate Foundation and the USAID Climate Finance for Development Accelerator (CFDA) are acting as IMCA’s Operating Partners, with support from the Climate Investment Coalition.
The market study, which was conducted by Marlow Global, can be downloaded from the IMCA website: https://www.worldclimatefoundation.org/imca.
Applications for the GVCA window can be submitted here: https://airtable.com/appdvtTQ99F3lQ2nB/shrNSiTMzB58dearv.
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