The International Finance Corporation, a member of the World Bank Group, is providing a $30 million loan to waste management company Averda, as it looks to continue teaming up with UAE-based companies to help them to expand in developing and emerging markets.
The financing will help Averda to build its resilience after the coronavirus pandemic and enable it to continue its planned growth in Oman, Morocco and South Africa, the IFC said on Thursday.
“This is the first IFC investment in the private waste management sector in Middle East and Africa. It is totally aligned with our World Bank Group … Climate Change Action Plan of 2021 to 2025 to boost climate finance to developing countries,” Sufyan Al Issa, IFC's head in the UAE, told The National.
“IFC is committed to play its role in terms of supporting financing for climate business.”
Averda provides waste management services to more than 60,000 private and public sector clients, covering about 12 million residents across eight countries in the Middle East, Africa and South Asia.
The company is increasingly focusing on sustainable solutions that extract value from waste and drive the circular economy.
Waste generation is expected to triple in sub-Saharan Africa and double in North Africa by 2050, and requires immediate action to mitigate its impact on climate, according to a World Bank report.
The investment aligns with the World Bank's climate strategy of increasing climate financing to developing countries and the IFC’s commitment to supporting cross-border investments.
“If we don't make … meaningful progress in tackling the climate crisis in the next decade, we are really in serious trouble,” Mr Al Issa said. “We are running out of time.”
The IFC, which is based in Washington, is the largest global development institution focused on the private sector in developing countries.
It teams up with entities from start-ups to venture capital companies, financial institutions and private companies to boost economic activity and also support the climate and gender agendas.
In 2021, the IFC invested $31.5 billion, including $23.3bn in long-term finance and $8.2bn in short-term financing, in private companies and financial institutions.
IFC’s cross-border investments in GCC-based companies to date stands at $5.1bn from the IFC’s own account and $3.4bn it has in mobilised, financing 148 projects worth $22bn, according to the IFC's data.
The UAE, the second biggest Arab economy, remains a major focus market for the IFC within the six-member economic bloc of GCC. Since 2003, the IFC has invested in 37 UAE companies to help them to expand their investments and operations into developing and emerging markets.
“The key issue for me is around what we do in the UAE … in terms of supporting UAE-based companies, in terms of their expansion and investment in emerging markets, and even bringing them to new markets,” Mr Al Issa said.
“The focus on the UAE is extremely important, given the type of market that we are talking about, the opportunities and also their strategy when it comes to [the] global development agenda and … investments outside the UAE.”
The IFC said there are “a lot of opportunities at this stage”, as the UAE prepares to host Cop28, after Egypt, which is hosting Cop27 this year.
The UAE aims to become carbon neutral by 2050 and plans to invest Dh600bn ($163bn) in clean and renewable energy sources in the next three decades.
Having two major global climate events in the region will give an increased push to climate financing, Mr Al Issa said.
“This, in fact, will give an increasing momentum to the climate agenda, both in terms of attention from governments in the region, but also in the resources that will be put [by] countries and the private sector in the climate business,” he said.
“Key in this space is to have alignment between public sector and private sector investment, as well as IFIs [international financial institutions].”