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United States Announces Key Investments During Africa Climate Summit

United States Announces Key Investments During Africa Climate Summit
United States Announces Key Investments During Africa Climate Summit

United States Announces Key Investments During Africa Climate Summit

This week, Special Presidential Envoy for Climate John Kerry and officials from the U.S. Agency for International Development (USAID), the Department of Energy, the U.S. International Development Finance Corporation (DFC), and the U.S. Department of Agriculture (USDA) participated in the Africa Climate Summit, which convened leaders, ministers, and civil society representing countries from across Africa in the effort to respond to the climate crisis.  This partnership built on President Biden’s commitments during the December 2022 U.S.-Africa Leaders Summit in Washington, DC.

Key announcements from this week’s summit included:

  • $30 Million to Support Initiatives[1] under the President’s Emergency Plan for Adaptation and Resilience (PREPARE) in Africa:  
    • The United States intends to provide an additional $20 million to the Africa Adaptation Initiative (AAI) Food Security Accelerator, which will dramatically speed and scale up private sector investments in climate resilient food security in Africa.  With U.S. support, the Accelerator will help identify, structure, and de-risk a pipeline of transformative adaptation investments in food security, helping to unlock private capital that is already standing ready to invest in these innovative solutions, ranging from cold storage logistics to climate resilient agriculture and post harvesting processes.  This will bring our total support for the AAI Food Security Accelerator to $45 million.
    • The United States also intends to provide an additional $10 million to the CRAFT TA Facility, which will help to demonstrate and de-risk market opportunity for climate-resilient technologies and solutions that help manage risks to food security.
    • This additional $30 million builds on a $100 million announcement made in July 2023 to support climate-resilient food security through the Vision for Adapted Crops and Soils (VACS), which seeks to boost agricultural productivity and nutrition by developing diverse, climate-resilient crop varieties and building healthy soils, with a specific initial focus on Africa.
  • Mobilizing Investment in African Climate Solutions: 
    • Through DFC, the United States has approved an up-to $25 million equity investment in Novastar Africa People + Planet, a $250 million venture capital fund that will make early-stage investments in innovative companies that use new and existing technologies to address climate change and support agriculture and climate resilience across Sub-Saharan Africa.  The Fund will make investments in innovative African companies with potential for both rapid growth and meaningful ability to mitigate or adapt to climate change and its agricultural impacts.
    • Through USAID’s Enterprises for Development, Growth, and Empowerment (EDGE) Fund, the United States will invest $2.5 million into Acorn’s Cooperative Carbon Finance Fund as a first loss tranche, thereby de-risking investment in carbon finance, unlocking access to the voluntary carbon market, and helping the fund meet its target of catalyzing $110 million to support smallholder farmers to transition to climate-smart and resilient agriculture.
    • Through USAID and Prosper Africa, the United States will invest a combined $1.75 million in two impact investment funds, EG Capital and BHA Capital, with an aim to leverage $130 million to help communities build resilience to climate risks.
  • Over $200 Million in Funding to Expand Access to Renewable Energy in Africa through DFC and USAID Initiatives: 
    • Through DFC, the United States provided a $100 million direct loan to Mirova SunFunder for the $500 million Mirova Gigaton Fund to support off-grid clean energy across the African continent.  The fund will finance distributed clean energy projects to build climate-friendly solutions in response to increasing demand for energy in developing countries.  The fund is expected to increase access to reliable and cost-effective off-grid solar energy for tens of millions of low-income people, predominantly in Sub-Saharan Africa.
    • Through DFC, the United States is providing up to $50 million in political risk insurance coverage to Greenlight Planet to support the distribution and financing of high-quality affordable off-grid solar system solutions for households and small businesses across Nigeria.  Greenlight’s PAYGO (pay as you go) model increases financial inclusion for renewable energy, by providing a financing product that allows greater access to renewable energy to communities in rural areas that are both under-electrified and unbanked.
    • Through DFC, the United States invested $40 million in equity into the $300 million Africa Renewable Energy Fund II (AREF II), a private equity fund focused on developing, building and operating clean energy assets across Sub-Saharan Africa.  AREF II, the second African fund managed by Berkeley Energy, targets investments in renewable energy, including run-of-river hydropower, wind and solar projects, as well as battery storage opportunities.
    • Through Power Africa, the United States will invest $4.8 million to advance activities that respond to South Africa’s Just Energy Partnership investment plan, in partnership with the U.S. African Development Foundation and Departments of Energy, Commerce, and State.
    • Power Africa will invest $6.3 million in the African Development Bank’s Sustainable Energy Fund for Africa, subject to Congressional notification, to strengthen access to electricity and $2.7 million in the African Legal Support Facility to provide counsel to clean energy transactions, building on more than a decade of support for each fund.
  • Investing in Ecosystem Conservation: 
    • USAID will invest $2.1 million to improve the climate resilience of coasts and fisheries in Tanzania as part of the ongoing Heshimu Bahari (Respect the Ocean) Activity.
    • USAID will invest an initial $8 million to launch Tumaini Kupitia Vitendo (Hope through Action), a five-year partnership with the Jane Goodall Institute to strengthen government, village, and stakeholder management of natural resources in Tanzania.
    • USAID will invest an initial $1.2 million to launch PLANETA, a platform to facilitate investment in ecosystem restoration and strengthen the enabling environment for carbon markets in Mozambique.
  • Investing in Urban Resilience:
    • Through Development Innovation Ventures, USAID anticipates investing $1.5 million to scale up access to clean, green, public transport by supporting Kenya’s BasiGo electric bus transport company to expand to Rwanda.
    • USAID officially launched work to support the C40 Cities Finance Facility, funding for which was announced in June.  USAID’s contribution is helping to increase the CFF’s focus on adaptation, including supporting two South African cities to use nature-based solutions to mitigate flood risk.
  •  Investing in Kenya’s Climate Leadership: 
    • USAID has invested $1.4 million to support the Government of Kenya to develop its carbon market activation plan and regulatory and legal framework around carbon.
    • USAID officially expanded its Clean Air Catalyst initiative to Nairobi.  The Catalyst is USAID’s flagship effort to reduce air pollution, currently also working in Jakarta, Indonesia and Indore, India.  USAID will invest $2.9 million to support local government leaders across the three cities to reduce air pollution from leading sources such as transportation and waste burning.
  •  Investing in Climate Resilience for Refugees, Migrants, and Host Communities in Kenya:
    • The United States intends to make a $4 million contribution to support a new program for the International Organization for Migration to support migrants and refugees in Kenya.
    • This program will strengthen the resilience of migrants, refugees and their Kenyan hosts facing climate hazards in Garissa and Turkana counties through adaptation support for agricultural livelihoods, improved data systems, and tools to address the basic humanitarian needs and increase the resilience of climate-displaced populations.
  • Investing in Animal Health: 
    • USDA has entered into a $17 million partnership with the World Organization for Animal Health (WOAH) to address critical animal health issues globally, including in Africa, focused on developing stronger, resilient animal health infrastructures for the long-term.

 

[1] Funding for both initiatives subject to the completion of domestic procedures.

 

Official news published at https://www.state.gov/united-states-announces-key-investments-during-africa-climate-summit/