UK investors poised to pour billions into Africa’s green economy

UK investors poised to pour billions into Africa’s green economy   

Financing institutions in the UK are looking to invest billions of pounds into the development of Africa’s clean infrastructure over the next five to ten years.

UK institutions have been investing aggressively into Africa over the last two years, despite setbacks as a result covid-19. Clean water provision, forestry and agritech, for example, will become increasingly important moving forward.

CDC Group, the UK’s development finance institution and top impact investors, yesterday announced that it had exceeded its 2020 commitment to invest £2- billion in Africa over the last two years.

Nick O’Donohoe, CEO of CDC/BII was a delegate at the Africa Investment Conference held in London yesterday, which was also attended virtually by WhyAfrica.

According to O’Donohoe, the CDC Group (soon to be renamed British International Investment [BII]), had invested close to £2.2-billion in total in African businesses in 2020 and 2021, despite the unprecedented upheaval caused by the covid-19 pandemic.

“I am delighted that we exceeded the ambitious target we set at the Africa Investment Summit held in London in 2020. This was during a period when CDC rapidly pivoted to support our portfolio and mitigate the economic fallout of the pandemic in the countries in which we invest. The role of DFIs such as CDC was vital in supporting vulnerable countries that did not have the financial reserves to protect their economies,” said O’Donohoe.

“Moving forward, British International Investment intends to invest between £1.5 and £2-billion per annum between 2022 and 2026 to support the UK government’s Clean Green Initiative and to create productive, sustainable and inclusive economies in Africa, parts of Asia and the Caribbean,” said O’Donohoe.

Last year saw CDC/BII make its largest ever deal in Africa – a partnership with DP World worth up to $1.7-billion – to significantly boost the continent’s ability to trade globally by expanding its port capacity. Other key investments include Liquid Telecom, that is building a pan-African fibre-optic network, and in the Global Partnership for Ethiopia, a consortium led by Vodafone to build a new, world class mobile network in Ethiopia.

Investing in the fight against climate change

Investing in clean infrastructure will be central to BII’s strategy over the next five-year period. At least 30% of total investment by value will go into climate finance.

Among the major clean infrastructure investments made in Africa by the company over the last strategy period was a $100-million (£75.5 million) commitment to the Nachtigal Hydro Power in Cameroon, $50-million (£36.8 million) for the Malindi Solar Project in Kenya [which became operational recently] and $50-million (£36.8 million) for ACWA Power in South Africa.

Speaking at the 2022 Africa Investment Conference, Chris Chijiutomi, Director and Head of Infrastructure Equity, Africa and Pakistan, at CDC/BII, said that clean infrastructure investment for British International Investment will go beyond renewables. “Clean water provision, forestry and agritech, for example, will become increasingly important moving forward,” said Chijiutomi.

“We also continue to power Africa’s growth through our investee company Globeleq which last year succeeded in securing 1.4GW of wind and solar projects in South Africa,” said Chijiutomi.

In addition to investing in utility scale projects, BII will prioritise technology-backed Venture Capital opportunities in smaller businesses that have the potential to deliver innovative, local solutions to mitigate the impacts caused by the climate crisis.

UK investors poised to pour billions into Africa’s green economy  

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