By Gom Mirian
The President of African Development Bank (AFDB), Akinwumi Adesina, has called for innovative approaches to project planning and project de-risking to increase private sector participation in sustainable development.
Adesina made the request on Wednesday during a global meeting in Vienna, Austria, with representatives from the Organisation of Petroleum Exporting Countries (OPEC) Fund Forum, multilateral development banks, and intergovernmental organisations.
He said: “We’ve got where the private sector is. We’ve got US$ 145 trillion of assets under management (and) by 2026 it’s going to be there… but the issue here is that we need new ways of aggregation to prepare the projects, to de-risk the projects and lower the transaction cost for those deploying capital.”
The AFDB president noted that the Africa Investment Forum, initiated by the bank and seven partners, is a leading continental platform that is aggregating bankable projects to reduce fragmentation and make it easier to attract institutional investments.
“It has become today, the premier investment platform to do anything on investment in Africa, and in the last four years, we have been able to leverage about US$ 142 billion of investment interest into energy, water and sanitation, infrastructure, and transport corridors.
“We are bringing in private capital into agriculture that will create opportunities for the private sector to go into rural areas close to where the farmers are producing – they can buy food, they can process food, they can package food, they can export food and have a greater competitiveness for various value chains,” he said.
The Independent Review of Multilateral Development Banks’ Capital Adequacy Frameworks’ expert chair, Frannie Leautier, described the areas her committee found to optimise the effectiveness of their capital.
She listed these areas as embracing more financial innovations in capital deployment, strengthening engagement with credit agencies, implementing changes to increase transparency, and recognising callable capital as a potent tool of shareholders’ commitment.
Abdulhamid Alkhalifa, Director General of OPEC Fund, while speaking, emphasised the necessity for development financiers to restructure their businesses to draw in additional funding to address the enormous financing deficit.
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