(AfDB) - The African Development Bank is set to roll out the first green finance facilities in two public financial institutions in Benin and Côte d’Ivoire as part of its ground-breaking African Green Bank initiative. The host institutions are La Caisse des Dépôts et Consignations du Bénin (CDC Benin) and the Ivorian National Investment Bank (BNI).

As Africa’s premier development finance institution, the African Development Bank does not only provide fiscal resources to its regional member countries; it also galvanizes global support in promoting resilient, green, and sustainable growth.

It launched the African Green Bank Initiative in November last year to support the implementation of African countries’ Nationally Determined Contributions (NDCs).

African countries still face significant challenges in financing their climate transition. While investment needs resulting from NDCs are estimated at $2.8 trillion by 2030, funds invested on the continent still represent a limited share of global green finance flows, and the share covered by the private sector remains limited.

The African Green Bank initiative was conceived as part of measures to facilitate access to global finance from the current 3% to 10% annually by 2030.

The Initiative followed an assessment by the African Development Bank and the Climate Investment Funds in six African countries; Benin, Ghana, Mozambique, Tunisia, Uganda, and Zambia.

The assessment revealed that green banks have significant potential for attracting new sources of catalytic funds when supporting low-carbon, climate-resilient development through blending capital and mobilizing local private investment for green investments in Africa.

Bank vice president for Energy, Power, Climate and Green Growth, Kevin Kariuki, noted: “The African Green Bank Initiative is a powerful tool for reducing financing costs and mobilizing private sector investments in climate action in Africa.”

The Initiative would bolster the capacity of local financial institutions to build a robust pipeline of bankable green projects while de-risking investments and entrenching long-term investor confidence toward climate-resilient and low-carbon projects in Africa.

According to African Development Bank Vice President for Private Sector, Infrastructure and Industrialization, Solomon Quaynor, “this technical assistance will enhance local financial institutions’ climate governance, green projects’ origination and monitoring which is therefore key to attract private capital by entrenching long-term investor confidence.”

Audrey-Cynthia Yamadjako, the Initiative’s coordinator, said some $1.6 million had already been secured to create the first two facilities. She said green finance facilities, newly created or hosted in existing financial institutions, are “the solution to bring private finance at scale in climate action.”

Climate Investment Funds, a major global climate finance mechanism, Canada Climate Action Africa, the Green Bank Network, and the European asset management firm, Amundi support the initiative.

Amundi backs the Initiative through technical assistance activities, including training green facilities’ management and investment teams. Amundi will also mobilize its investment vehicles dedicated to sustainable development in emerging markets and developing economies to support green facilities’ capitalization and thus participate in developing green investments across the continent.