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Prosper Africa: Mobilizing Mainstream Investment into Climate Smart and Resilient Infrastructure in Africa

SpeakerS:

British Robinson, Coordinator, Prosper Africa, U.S. Agency for International Development (USAID)
Hamid Asseffar, Head of EMEA Sustainable & Impact Investing, Invesco
Hannah Gore-Randall, Managing Director, Legal & General Capital
Isabella da Costa Mendes, Founding partner & Co-CEO, ImpactA

With Core Programming Partner

“African countries and many other emerging and developing economies require significant investments to adapt their infrastructure and other key parts of their economies to counterbalance the physical effects of climate change. They also need to develop their economies in a sustainable way to ensure higher standards of living for their growing populations.” Hamid Asseffar
“We firmly believe that to be serious about the climate transition, there must be more institutional solutions for financing the transition in emerging markets.” Hannah Gore Randall
“In emerging markets, addressing climate challenges, reducing inequalities, and creating jobs do go hand in hand, and financing sustainable infrastructure in these regions will address all three challenges at the same time.” Isabella da Costa Mendes

Key takeaways:

  • Significant investment gaps in Africa: The investment gap in Africa can be significantly reduced by mobilizing institutional capital. Prosper Africa is taking steps towards this by awarding catalytic contributions to investment firms focused on resilient infrastructure and adaptation finance in Africa and the developing world.
  • Catalytic contributions to mobilize private capital: Prosper Africa announced two $5 million catalytic contributions to Invesco Climate Adaptation Action Fund and ImpactA Global’s strategy, aiming to catalyze over $800 million in private capital—an 80x leverage on the US taxpayer dollar.
  • Effectiveness of blended finance: Blended finance, leveraging public funds to mitigate risks for private investors, is an effective strategy to mobilize private capital into emerging markets and developing economies for climate adaptation and resilience projects.
  • Resilience of infrastructure debt in emerging markets: Infrastructure debt in emerging markets is resilient and delivers consistent and attractive risk-adjusted returns, while also providing meaningful impact to local communities by reducing inequalities and empowering vulnerable populations, particularly women.
  • Need for investment in sustainable infrastructure: Significant investment is needed to adapt infrastructure and economies in African countries to counterbalance the physical effects of climate change and support sustainable growth.
  • Importance of public-private collaboration: Collaboration between public and private sectors, along with financial innovation and education of institutional clients, is essential to address the challenge of mobilizing private capital towards Africa.
  • Mitigating perceived risks for institutional investors: Institutional investors often face challenges related to perceived risks in emerging markets. Partnerships and support from initiatives like Prosper Africa can help mitigate these risks and attract investment.

Action items:

  • Promote blended finance models: Encourage the use of blended finance strategies that leverage public funds, like those from Prosper Africa, to mitigate risks and attract institutional private capital into emerging markets for sustainable infrastructure projects.
  • Mobilize institutional capital: Work towards mobilizing a portion of the vast assets managed by U.S. pension funds, mutual funds, and insurers to invest in Africa, which could significantly close the investment gap.
  • Enhance public-private partnerships: Foster collaboration between public institutions and private investors to support climate adaptation and resilience initiatives in developing countries, especially in Africa.
  • Support women-led investment firms: Encourage investment in firms like Impacta Global, which are women-led and focus on financing climate mitigation and adaptation projects, contributing to the economic empowerment of women.
  • Educate institutional investors: Provide education and resources to institutional clients about the resilience and attractive returns of infrastructure debt in emerging markets to reduce perceived risks and increase investment flow.
  • Invest in sustainable infrastructure sectors: Prioritize investment in sectors such as renewable energy, health, water and sanitation, and sustainable mobility to meet the challenges posed by climate change.
  • Scale up catalytic contributions: Encourage governments and organizations to make catalytic contributions that can significantly leverage private capital, as demonstrated by Prosper Africa’s contributions leading to an 80x leverage.
  • Address climate change urgently: Recognize and act upon the urgent need to finance the global energy transition, particularly in underserved regions, to support sustainable growth and climate resilience.

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