Green Climate Fund (GCF) has completed accreditation of Africa Finance Corporation (AFC) as a partnering Institution. The development makes AFC the first African development finance institution to be accredited by GCF.
AFC was established in 2007 as a private sector-led investment bank and development finance institution that was to help mobilize and channel required capital toward driving the economic development of Africa.
It had submitted its application to be included as a GCF-accredited institution in the beginning of this year.
The application followed GCF’s invite to AFC to consider becoming an accredited institution. As culmination of the process, it received full accreditation this month.
The accreditation enables AFC to access the $9.3 billion committed capital of GCF. The pool of funds for climate change projects is to be utilized by members for on-lending, grants, lines of credit, guarantees and other fiduciary functions.
AFC has stated that it will invest the funds in renewable energy, which is one of its priority sectors.
AFC was the lead investor in the Cabeolica project, a $90-million, 26-megawatt wind power project in Cape Verde. It was the first commercial scale public private partnership wind farm in sub-Saharan Africa and is capable of meeting more than 20 percent of the power needs of Cape Verde.
GCF, headquartered in Songdo Republic of Korea, is a fund within the framework of the United Nations Framework Convention on Climate Change, or UNFCCC.
It was founded as a mechanism to redistribute money from developed nations to the developing world. And the fund is meant to assist developing countries in adapting and mitigating practices to counter climate change.
With 20 accredited entities, GCF is governed by a board of 24 members and is initially supported by an interim secretariat.
In due course the fund is expected to become the main multilateral financing mechanism to support climate action in developing countries.
Ajith Kumar S