A USD 2.1 million grant to support an African Development Bank (AfDB) project that could unlock substantial investment in climate-smart infrastructure and connectivity in North Africa was approved by the Multilateral Cooperation Center for Development Finance (MCDF) Governance Committee during its meeting in Egypt’s New Administrative Capital on 21 September.

The MCDF grant will deliver technical assistance to two local commercial banks in the region – Commercial International Bank in Egypt and Bank of Africa in Morocco – to develop green infrastructure banks and a pipeline of bankable green infrastructure and connectivity projects needed to achieve carbon reduction targets under the Paris climate change agreement.

It would help expand coverage of the African Green Bank Initiative launched by AfDB and partners at the 27th United Nations Climate Change Conference (COP27) in Sharm El-Sheikh, Egypt in 2022. The initiative aims to build the capacity of governments and international financial institutions (IFIs) to bridge the financing gap for promising climate-smart infrastructure and connectivity projects.

“The African Development Bank has identified the green bank model as a key driver to turn Africa’s USD 2.8 trillion Nationally Determined Contribution implementation needs into investments opportunities by 2030,” said AfDB’s Climate and Environment Finance Manager Gareth Phillips.

“Thematic investment vehicles like green banks are designed to mobilize private capital at scale and deliver national and sub-national climate finance at an affordable cost,” Phillips continued. “The green infrastructure banks of Morocco and Egypt will bolster connectivity and deliver low-carbon, climate resilient infrastructure projects which will strengthen regional integration, trade, and employment.”

The MCDF grant will build on the successful pilot of the African Green Bank Initiative in Benin and Côte d’Ivoire. Related activities to be financed by the MCDF grant in Egypt and Morocco will include the services of external experts to support the preparation of green infrastructure and connectivity projects, creation of credit enhancement vehicles, and mobilization of finance from third parties.