The World Bank Group and Ithmar Capital, a Moroccan Sovereign Investment Fund, have entered into a memorandum of understanding relating to the establishment of a Green Growth Infrastructure Facility for Africa (GGIF Africa), the first pan-African fund dedicated to green investment in the continent.
GGIF will be structured as private capital fund and its objective is to attract private investors with interest in Morocco or Africa who are looking for responsible and green investment opportunities. Its aim is to work as a catalyst for the transition of Africa into a green economy by supporting low carbon infrastructure such as clean energy, low carbon transportation and the efficient utilization of water resources.
GGIF will be sponsored by the World Bank and Ithmar Capital. This dual-sponsoring will allow the fund to benefit from the strengths of these two organisations; the World Bank with its expertise in fund establishment and policy work, and Ithmar Capital through its network of partners and experience in co-investment structuring.
The announcement was made today at the Finance Summit of COP22 in Marrakesh, the 22nd Conference of the Parties to the United Nations Framework Convention on Climate Change, focused on mobilizing stronger and more ambitious climate action.
GGIF will also include a Public Private Partnership (PPP) unit that will focus on the origination of viable projects in collaboration with Government agencies. This will result in a consolidation of PPPs in the targeted countries.
The World Bank and Ithmar Capital will work in close partnership with a broad range of public and private investors, including Regional Development Banks, Sovereign Wealth Funds, and global and regional institutional investors, to increase private capital participation in green infrastructure investments across the continent.
As well as leveraging private capital flows for investment in environmentally sustainable infrastructure, the GGIF will focus on reducing the risk of marginally non-bankable projects in order to render them viable. Tools will include innovative mechanisms for project preparation and capital structures.
The move has already received a letter of support from the IFSWF Chair (International Forum of Sovereign Wealth Funds), which has just launched its first working group dedicated to climate change. Sovereign Wealth Funds are natural investors in infrastructure projects on account of their long investment horizon, sovereign status, and relatively little need for portfolio liquidity.
Under the leadership of His Majesty the King Mohammed VI, Africa has become a "strategic priority for Morocco". Relying on its growing economy and European proximity, the Kingdom is working towards becoming a competitive African hub.
Morocco is already a key economic and strategic partner for many African economies, as evidenced by the rise in direct investment in high-value sectors such as banking, insurance, telecommunications, energy agriculture and social housing.
About Ithmar Capital:
Ithmar Capital was established on November 11th, 2011 by the Moroccan government and supported by the Hassan II Fund for Economic and Social Development under the name of Fonds Marocain de Développement Touristique (FMDT). The Fund is part of the long-term development plans initiated by The Kingdom of Morocco in different economic sectors.