Multilateral development finance institution the European Investment Bank (EIB) will invest $52.48-million in multilateral financial institution the Africa Finance Corporation's (AFC's) $750-million Infrastructure Climate Resilient Fund (ICRF) to accelerate climate adaptation and sustainable infrastructure across Africa.

The fund is managed by asset management branch AFC Capital Partners (ACP), which has already secured a $253-million commitment from the UN Environment Programme climate resilience funder Green Climate Fund (GCF), marking GCF’s largest-ever equity investment in Africa, the EIB said.

Additionally, the Nigeria Sovereign Investment Authority (NSIA) and two private African pension funds have also committed to the fund, demonstrating robust institutional backing on the continent and internationally.

The ICRF prioritises resilient, low-carbon solutions across transport and logistics, clean energy, digital infrastructure and industrial development, ensuring sustainable growth.

The GCF will play a critical role by providing technical assistance for due diligence and climate resilience monitoring while also covering the first-loss tranches on new investments, effectively de-risking projects and attracting private capital.

Once operational, the ICRF aims to invest in a diversified portfolio of 10 to 12 projects across Africa. It will also assist countries and entities in capacity building and the deployment of climate risk assessment and adaptation solutions.

“The EIB investment in ACP ICRF is intended to address the scarcity of equity capital for greenfield infrastructure projects, and to help overcome other market failures such as the lack of incentives for green energy solutions or market failures related to transport accessibility and digital connectivity.

“It also aims to improve the efficiency of logistics and trade corridors and contribute to the digital and energy transition,” the EIB noted.

Further, the EIB’s $52.48-million commitment is a strategic step toward the Fund’s $750-million target, aimed at catalysing additional investments from both private- and public-sector partners into climate-resilient infrastructure.

This commitment is expected to help mobilise approximately $3.7-billion in total financing, driving tangible, on-the-ground impact across Africa, it added.

The ICRF's structure, with support from the EIB and other institutions like the GCF, aims to de-risk climate investments.

The GCF is providing grant funding to help with due diligence and monitoring of climate resilience, which can make the investments more attractive to other investors.

Additionally, the fund will integrate innovative climate risk insurance to complement traditional indemnity programmes.

By investing in clean energy and digital infrastructure, the fund aims to support the broader green and digital transition in Africa and contribute to diversification and security of energy supply, as well as improved access to digital connectivity.

Further, the EIB investment aligns with EU strategies, the African Union's Agenda 2063 and the UN Sustainable Development Goals, and also aims to support the implementation of Nationally Determined Contributions, the development finance institution said.

The investments backed by the ICRF will actively promote the adoption of environmental, social and governance best practices, including gender equality, protection, and anti-discrimination policies.

The fund is committed to ensuring that infrastructure assets are designed, built, and operated to withstand and adapt to evolving climate conditions, the EIB said.