At the Summit for the New Global Financial Deal, which closed on Friday 23 June 2023 in Paris, France, Proparco and the International Finance Corporation (IFC) announced the mobilisation of $1.5 billion as part of the African Entrepreneurship Initiative. The funding is earmarked for climate-smart agriculture and inter-African trade. At the same time, the two financial institutions will invest in access to electricity in the Democratic Republic of Congo (DRC).
This was one of the key announcements made at the Summit for a New Global Financial Deal, which ended on Friday 23 June in Paris, France. Proparco, the subsidiary of the French Development Agency (AFD) group, and the International Finance Corporation (IFC) of the World Bank group have agreed to mobilise $1.5 billion for the African continent over the next few years.
Of this funding, one billion dollars will be used to finance small and medium-sized agricultural enterprises (SMEs) that have to cope with climatic hazards. At the same time, the two international financial institutions plan to finance €500 million for inter-African trade. The announcement of this funding comes against a backdrop marked by the implementation of the African Continental Free Trade Area (AfCFTA), an initiative aimed at accelerating trade between the 55 countries of the African Union (AU).
Implementing this initiative will require the active participation of the private sector, particularly SMEs. And to achieve this, “mobilising private financing is essential for SMEs”, said French President Emmanuel Macron during a round table discussion organised at the Summit for a New Global Financial Pact. This funding will be released under the African Entrepreneurship Initiative. The aim is to reduce food insecurity, which affects 140 million people, despite the abundance of resources in Africa.
Financing access to electricity in the DRC
Through this 1 billion dollar financing, the Alliance for Entrepreneurship in Africa aims to develop at least 1 million hectares of land over the next few years. As part of the alliance, the IFC and Proparco have announced their intention to participate in a Series B financing round organised by the electricity provider Nuru in the Democratic Republic of Congo (DRC). In the east of the DRC, the company led by Jonathan Shaw develops and operates hybrid solar mini-grids that supply electricity to commercial and industrial (C&I) customers and households.
Despite the insecurity in the east of the DRC and the risk of natural disasters, Nuru has been operating its first 1.3 MW mini-grid in the city of Goma since 2020. The Series B financing will enable the company to develop an installed capacity of 13 MW to supply the towns of Goma, Kindu and Bunia. Proparco plans to make its Series B investment as part of the African Renewable Energy Scale-Up facility (ARE Scale Up facility), an initiative supported by the European Union (EU) to stimulate private sector investment in on-grid and off-grid renewable energy production in Africa.
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