AFRICA GREEN ECONOMY INITIATIVE



Climate change is an unprecedented global social, political, and economic crisis and will undoubtedly be one of the most prominent political and economic challenges of the 2020s.

Consequently, there have been growing global concerns for achieving sustainable and environment-friendly development which have resulted in sharp uptake in green projects. The likes of the World Bank, European Commission, United Nations Environment Program and other international agencies have all championed the cause for achieving a cleaner, resilient and sustainable world economic ecosystem. Along with this, an increase in financing has also been required to fund such green projects. In 2008, the World Bank pioneered the concept of ‘green bonds’ which gives investors an innovative way of supporting clean energy, mass transit, and other low-carbon projects. Since then, financial instruments supporting green projects have rapidly been on an upward growth trajectory. In 2018 the Indonesian Government issued US$ 1.25 billion green sukuk to finance green projects in Indonesia. Recently, the Islamic Development Bank has launched a US$ 1.10 billion green sukuk to address climate change issues in its member countries.

Along these growth lines, Islamic finance has a tremendous opportunity to develop instruments that can support the global surge in green projects. The principles of Islamic finance share substantial synergies with the concept of environment-friendly and sustainable development. As a result, the Africa Islamic Economic Foundation has launched initiatives to support the development of Shari’ah-compliant green financing facilities and investment opportunities to meet the expanding liquidity requirements to fund green projects in the following sectors in Africa:

  1. Renewable energy: – Solar, wind, biomass, geothermal

  2. Resource efficiency: – Green buildings, resource efficiency, retrofitting, innovative technologies

  3. Waste management: – Agri-waste, food-waste, e-waste, residential, water treatment

  4. Supply chain risk adaptation:– Resource maximization, optimization, insurance

  5. Clean-tech applications:– Technology investment, blended solutions, supply-chain optimization

  6. Forestry:- Sustainable management, investment, resilience

The Africa Islamic Economic Foundation under its Green Economy Initiative works with project developers to connect qualified projects in the foregoing sectors to development finance institutions (DFIs), Islamic capital markets, project preparation support instruments, impact investors and commercial lenders. AFRIEF delivers through a lean, non-bureaucratic setup, and an à la carte portfolio of services:

  1. Development support geared at projects at a relatively early stage, but with concrete financing prospects, and providing guidance on the necessary steps of project development in order to ensure completeness and quality;

  2. Structuring support advising on essential aspects of business case and financing models and supporting developers towards structuring their propositions in a way that corresponds to the needs and expectations of financiers;

  3. Access to finance support to identify appropriate financing options, including Green Sukuk for projects and to align project documentation with the specific requirements of financing and support instruments;

  4. Transaction support to provide assistance in the contractual negotiations during project preparation, including (for example) aspects of the financing transaction, term sheets, contractual agreements with specialised advisory, or the fulfillment of conditions precedent.

Please submit your project proposal and specific request for assistance (comprehensive details about your company, your project, the stage of development you find yourself in and what type of assistance you seek from us) to:  info@afrief.org