AFRICA: JBIC and AFC join forces to finance the energy transition

An agreement has just been signed between the Africa Finance Corporation (AFC) and the Japanese Bank for International Cooperation (JBIC) in Sharm el-Sheikh, Egypt. The two institutions will work together to finance the energy transition in Africa.

The energy transition has a cost. And Africa is struggling to mobilise the funding needed to accelerate the deployment of the renewable energies it needs for its socio-economic development. To overcome this obstacle, the Africa Finance Corporation (AFC) and the Japanese Bank for International Cooperation (JBIC) have signed a partnership agreement. The agreement was signed on the sidelines of the 58th Annual Meeting of the African Development Bank (AfDB), which runs until 26 May 2023 in Egypt.

The two financial institutions intend to work together to finance clean energy production infrastructure, including green hydrogen and its derivatives, notably green ammonia. By entering into this partnership with AFC, JBIC is fully in line with Tokyo’s strategy to increase Japanese investment in Africa tenfold. This objective was reaffirmed at the 8th Tokyo International Conference on African Development (TICAD-8).

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On the sidelines of this event, organised by Japanese diplomacy in Tunisia in 2022, the AFC signed a partnership agreement with Tokyo-based Mizuho Bank to support the development of sustainable infrastructure in several key sectors, notably energy. The AFC has increased its investments in this sector tenfold in recent years. A few months ago, the financial institution based in Lagos, Nigeria, concluded the purchase (with Infinity Energy) of Lekela Power, a wind energy producer based in Amsterdam, the Netherlands, with an installed capacity of 1,000 MW in Africa.

“Partnerships with like-minded financial institutions are key to mobilising the capital and expertise needed to build a pragmatic path to green energy in Africa. Through this collaboration, we envision a transformative alliance that harnesses the expertise, resources and innovative financing solutions of both institutions to secure a greener future for the continent while continuing to make the case for Africa’s industrialisation,” says Sanjeev Gupta, Executive Director and Chief Financial Officer of AFC.