The African Development Bank (AfDB) has approved a $30 million equity investment in Africa Finance Corporation (AFC) to launch innovative "green shares" to fund climate action projects across Africa.

The financial instruments are expected to unlock significant funding for high-impact projects, including wind and solar power plants in Djibouti and Egypt, and energy storage systems in Cabo Verde.

AFC will leverage the green equity and mobilise debt funding from capital markets for on-lending to sub-projects.

Despite contributing less than 3 per cent of global carbon emissions, Africa faces an annual infrastructure financing gap of $170 billion.

The partnership with AFC is a significant milestone in channeling domestic, regional, and global capital into climate resilience projects.

Solomon Quaynor, African Development Bank Vice President for Private Sector, Infrastructure and Industrialisation said: "The collaboration between the African Development Bank and Africa Finance Corporation exemplifies the transformative power of strategic partnerships. The Bank Group’s first-mover investment in AFC’s green shares is expected to attract other regional and global investors, amplifying the impact of this initiative, and sending a strong signal to global investors that Africa is ready to lead the way in green growth.

"We are honoured to welcome the African Development Bank, Africa’s largest development finance institution, as the first investor in our Green Shares program," said Banji Fehintola, Executive Board Member and Head of Financial Services at AFC. "Their $30 million commitment highlights the critical role of sustainable financing in tackling Africa’s climate and infrastructure challenges, while strengthening our shared mission to drive transformative change across the continent."