Landmark MOU signed to Promote Financing and Execution of Climate Action Projects in Africa

 

By Charles Ogallo

The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), Signed a Landmark MoU with Africa Finance Corporation (AFC) Member States Utilizing ICIEC’s De-risking Solutions. The MoU was signed on November, 9 by Mr. Oussama Kaissi, Chief Executive Officer of ICIEC, and Mallam Samaila D. Zubairu, the President and Chief Executive Officer of the AFC, in Sharm El Sheikh during the occasion of the COP27 gathering. The two parties agreed Tuesday to cooperate in promoting joint action in the origination, financing and execution of Climate Change projects through ICIEC’s credit and investment insurance support in African Member states AFC is the leading multilateral infrastructure development finance institution in Africa . ICIEC and peer multilaterals have an important role in contributing to the international climate finance ecosystem. It is committed to further boosting its green and sustainable finance operations. Sustainable investment, climate action, adaptation and finance, and Green Finance are firmly embedded in the due diligence process of both institutions through linking all new business and other queries with SDG and climate action indicators. Promoting climate action through capacity development, resilient financing, and policy support in climate adaptation infrastructure and through the provision of risk mitigation and credit enhancement covers the mandates of both ICIEC and AFC The MoU recognizes that co-operation between AFC and ICIEC would bring about better co-ordination and more efficient implementation of their respective activities to the benefit of Climate Action projects, including renewable energy production in ICIEC member states, including in Africa region. In this respect, the two institutions under the 3-year MoU will exchange information on their respective renewable energy project pipelines on a regular basis, with a view to explore origination, financing, insuring and delivery of such projects focusing especially on the renewable energy sector.  The AFC has a proactive relationship with the IsDB Group and has even raised infrastructure funding through the issuance of a Sukuk. Mr Oussama Kaissi, Chief Executive Officer of ICIEC, strongly welcomed the signing of the MoU with AFC: “This MoU further enhances ICIEC’s evolving playbook on Climate action and risk mitigation whether it relates to financing, underwriting, credit enhancement, and risk management. It is also yet another example of South-South Cooperation and the recognition that Africa has to come up with African financing solutions to finance African needs. We look forward to building on this important relationship with AFC in this key area of Climate Action infrastructure.” The MOU comes at a critical time when African countries are struggling to get enough funding for implementation of their climate projects in a bid to mitigate and adapt to drastic and adverse effects of climate change across the continent.   51 out of 53 African countries that submitted Nationally determined contributions have provided data on the costs of implementing their NDCs, according to a Climate Policy Initiative report which concludes that around USD 2.8 trillion are required between 2020 and 2030 to implement Africa’s NDCs. The success of this year’s UN climate summit in Egypt ultimately rests on its ability to get money flowing from wealthy countries to those most in need – at the pace and scale required to match the climate crisis.