The Arab Co-ordination Group has pledged to allocate up to $50 billion to boost development projects in Africa, in the lead up to the Cop28 summit in Dubai.
The funds will support initiatives in areas such as energy security and energy transition, regional integration and connectivity, trade finance and facilitation, as well as gender and youth initiatives, the Saudi Press Agency reported on Thursday.
Enhanced support for fragile states, private-sector financing, food security, poverty and unemployment will also be part of the new funding plan by the group, which comprises 10 development institutions.
“Recognising that the link between sustainable development and climate financing is cross-cutting and complex, the ACG reaffirms its commitment to scaling up financial assistance for climate change in line with the Paris Climate Agreement and to helping bridge investment gaps in energy access, including low-carbon energy sources, climate mitigation, adaptation and resilience, as well as food security,” the SPA cited the ACG as saying.
The initiative comes as global funding institutions and countries step up efforts to boost funding for Africa as it moves to curb the impact of climate change.
At the Africa Climate Summit in September, the UAE pledged $4.5 billion to speed up the development of clean energy projects.
Masdar has pledged $2 billion of equity and will mobilise an additional $8 billion in project finance aimed at delivering 10 gigawatts of clean energy capacity through its Infinity Power platform on the continent by 2030.
Amea Power will mobilise $5 billion – comprising $4 billion in project finance and $1 billion in equity investments – to help fund five gigawatts of renewable energy capacity in Africa by the end of the decade.
The Abu Dhabi Fund for Development will provide $1 billion in assistance for basic infrastructure while Etihad Credit Insurance will provide $500 million in cover to lower risk and unlock private capital.
“We are acutely aware of the development challenges the continent faces – the repercussions of the recent global pandemic, the challenges of food security and the escalating climate crisis,” Islamic Development Bank president Muhammad Al Jasser said.
The Islamic Development Bank and other financial institutions such as the Abu Dhabi Fund for Development, the Arab Fund for Economic and Social Development, the Arab Monetary Fund, the Opec Fund for International Development and the Saudi Fund for Development (SFD) are part of the ACG.
The group has cumulatively invested more than $220 billion to support development projects in Africa.
“We are committed to working hand in hand with African nations, regional entities, civil-society groups, the private sector and fellow development institutions,” Mr Al Jasser said.
Separately, the SFD on Friday said it signed 14 new development loan agreements valued at more than $580 million to fund projects in the healthcare, water, education, and transportation sectors in twelve countries. These countries include Angola, Burkina Faso, Benin, Burundi, Cabo Verde, Guinea, Malawi, Mozambique, Niger, Rwanda, Sierra Leone and Tanzania.
It also signed a preliminary agreement with the African Finance Corporation to identify, develop, and co-finance infrastructure and industrial projects across the continent, according to the statement.
The SFD has funded more than 800 development projects worth $20 billion in more than 100 countries globally since 1975. In Africa alone, it has financed more than 400 projects worth $10.7 billion in 46 countries, accounting for 57 per cent of SFD’s funding in developing countries worldwide.
Developing countries require about $1.7 trillion a year in the clean energy sector but only managed to attract $544 billion in foreign direct investment in 2022, Unctad, the UN intergovernmental organisation that promotes the trade interests of developing countries, said in a report in July.