GIP Africa Chapter Launched at COP27

Move to bring `new finance’ for sustainable development ventures

Cairo, Egypt | THE INDEPENDENT | The Green Investment Principles (GIP) for the Belt and Road officially announced its second regional office, Africa Chapter, during the COP27.

Hendrik du Toit, Founder and CEO of Ninety One, will be the Chairman of the chapter, and Brahim Benjelloun-Touimi, Group Director and General Manager at Bank of Africa BMCE Group will serve as the Co-Chair and Secretary General.

Four years after establishment, the GIP has expanded its membership that currently includes 44 signatories, most of which are large financial institutions, and over a dozen supporting organisations. Under the GIP, these member institutions, which manage over $40 trillion in assets, have committed to grow their green and low-carbon investments in developing countries and emerging markets, to enhance ESG risk management, improve disclosure, and adopt innovative green finance products.

The GIP has also created three member-driven working groups that have developed a range of risk measurement and disclosure tools, showcased many innovative products, and contributed to green finance capacity building in less developed countries.

As part of the Vision 2023, the GIP intends to establish several regional offices in key emerging market regions, with an aim to engage with more financial institutions in developing countries and to catalyse green investment along Belt and Road. After the Central Asia office launched in 2021, the Africa chapter will seek to expand membership of the GIP, facilitate green investment opportunities, build capacity for local financial institutions, and convene resources to support development sustainable standards and principles for Africa.

Dr. MA Jun, Co-chair of the GIP Steering Committee and Chairman of China Green Finance Committee pointed out that “after years of rapid development of the global green and sustainable finance market, the development is still very uneven across the world”.

He said the low-income regions, including those in Africa and Asia, account for large part of global population, nature resources and future growth, but have very limited access to the green and sustainable finance instruments”.

Ma highlighted that

“The international community should assist Africa to address three important challenges: enhancing access to low-cost funding through de-risking facilities and development finance, establishing a transition finance framework, and financing biodiversity and nature-positive activities,” Ma said.

Sir William Russell, Co-chair of the GIP Steering Committee and former Lord Mayor of City of London, commended the progress the GIP has made in the past years and said its commitments of international cooperation on green finance are important. He said that the GFANZ, which was launched in 2021 during COP26, has made significant progress in scaling up commitments from financial firms for net zero targets and is now working on implementation, which should complement the work of the GIP, including in Africa.

JIN Zhongxia, Director General of International Department at the People’s Bank of China conveyed his expectation for GIP Africa office.

“the office can provide opportunities to explore local innovative solutions in taxonomies, disclosure and transition finance. I believe the office can also help local financial institutions build in-house capacity, expand green businesses, and enhance climate resilience.”

Yaseen Anwar, Chairman of the GIP Central Asia Office and former Governor of the State Bank of Pakistan, reflected on the progress made and lessons learnt by the Central Asia Office of the GIP. He said that “the GIP is providing an important opportunity for many countries along the Belt and Road to improve access to sustainable finance at affordable costs for local green and sustainable projects, which is important for these economies to realise their own climate goals.”

Gim Huay Neo, Managing Director, Head of Centre for Nature and Climate, World Economic Forum, highlighted three imperatives that are important for the GIP Africa office to work on, including acceleration in developing green and social-inclusive infrastructure, proper green and sustainable standards and alignment of taxonomies, and conducive policy environment”.

Deborah Lehr, Vice Chairman and Executive Director, Paulson Institute, addressed the growth potential of Africa in terms of climate action and green development. She said that the GIP presents opportunities for Africa to realize climate transition and avoid projected emissions in the business-as-usual scenario.

Hendrik du Toit and Brahim Benjelloun-Touimi welcomed the establishment of the GIP Africa Chapter and expressed strong confidence for its future operations. Through the launch of the Africa office, they said, the GIP can bring in “new finance”, including transition finance, to support the sustainable development of Africa. The GIP Africa office, as the second regional chapter launched, will build on current experiences, collaborate with other international initiatives, and continue sharing leading practices from other GIP members.

The launch ceremony was followed by a panel discussion with a focus on risks and opportunities for green investment in Africa. Panelists stressed that Africa needs to massively scale up its sustainable finance market and develop transition finance to meet the climate goal, and international assistance and knowledge sharing will be critical. It was also stated that Africa has abundant experiences in nesting climate action with Sustainable Development Goals, while many of the innovative financing solutions originated here from this continent. Panelists raised expectations to the GIP Africa Office and highlighted the importance of engagement with key stakeholders, alignment with other initiatives, leveraging on public finance, as well as knowledge sharing and capacity building activities.

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