AFRICA Finance Corporation (AFC), a prominent infrastructure solutions provider in Africa, and Japan Bank for International Cooperation (JBIC), Japan’s policy-based financial institution, have officially signed a Memorandum of Understanding (MOU) to embark on collaborative efforts in infrastructure projects that will drive the energy transition in Africa and foster economic sustainability on the continent.
The MOU was formalised on May 23 during the 58th Annual Assembly of the African Development Bank held in Egypt.
The primary goal of this collaboration is to develop and finance infrastructure projects across Africa that actively contribute to expediting the continent’s journey towards achieving net-zero emissions in a pragmatic manner. Priority projects include renewable energy technologies/systems such as green and blue hydrogen and ammonia, highly energy-efficient power plants, and carbon capture and storage (CCS) technology, among others.
AFC plays a pivotal role in financing Africa’s energy transition through its investments in renewable energy projects, support for energy infrastructure development, and provision of financing for energy efficiency initiatives. Notably, the corporation recently concluded the acquisition of Lekela in partnership with Infinity Power, solidifying AFC and its partners as the largest renewable energy provider in Africa. Their combined gross capacity of 1.27 GW powers over 1 million homes and offsets 2.7 million tons of CO2 annually.
Sanjeev Gupta, Executive Director & Head of Financial Services at Africa Finance Corporation, highlighted the significance of partnering with like-minded financial institutions such as JBIC to mobilise the capital and expertise necessary for achieving a practical pathway to net-zero emissions in Africa. He envisions a transformative alliance that harnesses the expertise, resources, and innovative financing solutions of both institutions to drive a greener future for the continent while concurrently advocating for African industrialisation.
‘Partnerships with like-minded financial institutions like JBIC are critical in mobilizing the capital and expertise needed to achieve a pragmatic path to net zero in Africa. Through this collaboration, we envision a transformative alliance that harnesses the expertise, resources, and innovative financing solutions of both institutions, to drive a greener future for the continent whilst continuing to advocate for African industrialisation,’ Gupta said.
Japan has been a crucial partner for AFC in fulfilling its commitment to building critical infrastructure in Africa that positively transforms lives. In late 2022, AFC successfully concluded a dual currency Samurai term loan facility totalling $389 million (split into $382 million and ¥1bn), marking its second venture into the Japanese capital markets. This collaboration with JBIC further solidifies the relationship between the two entities and facilitates the pursuit of sustainable development in Africa through robust infrastructure investments.