ABIDJAN and TORONTO, 7 July 2017 – The Association of African Development Finance Institutions (AADFI) and Convergence Blended Finance (Convergence) have entered a Memorandum of Understanding (MoU) to collaborate to attract more investment to Africa through “blended finance – the strategic deployment of public sector and philanthropic sector funds to catalyse private investment to developing countries.
The Addis Ababa Action Agenda, adopted by the United Nations member states in 2015, identifies the critical importance of mobilising private sector investment to developing countries to achieve the Sustainable Development Goals (SDGs). The UN estimates the SDG financing gap at USD 2.4 trillion per annum globally, with most development experts agreeing that Africa is the continent with the highest financing needs.
The AADFI’s 82 active member-institutions are collectively the largest financial investors in Africa, investing around USD 14 billion per annum in Africa’s 54 countries. To achieve the SDGs in Africa, the two organisations will collaborate to increase the knowledge and awareness of blended finance among AADFI members, and increase their capacity to design, implement and deploy blended finance solutions to boost the amount and impact of their investments.
To boost investment in Africa through blended finance, AADFI and Convergence have agreed to pursue collaboration in the following areas:
- To deliver training workshops, seminars and webinars to build the capacity of and create awareness among AADFI members, their shareholders and associates on blended finance;
- To co-organise workshops and conferences to increase the knowledge of AADFI members, shareholders and associates on development finance and blended finance;
- To design and implement blended finance strategies and transactions to increase investment in Africa;
- To promote activities aimed at attracting desired funding to AADFI members for private sector investment in SDG priority sectors.
- To share human and material resources along with technical assistance for MoU activities.
“Blended finance has become an increasingly important mechanism within the development finance community since the adoption of the Addis Agenda. We are glad to be teaming up with Convergence to maximize the ability of our member institutions to attract private sector investment to Africa through blended finance,” said Joseph Amihere, Secretary General of AADFI.
“Convergence and our stakeholders, including international development agencies, prioritise achieving the SDGs in Africa. We see blended finance having the capacity to make a significant contribution in infrastructure, agribusiness and private sector development. AADFI’s member institutions are on the front lines in all African countries and we hope to support them to mobilise higher levels of impactful financing,” said Joan Larrea, Convergence CEO.
About the Association of African Development Finance Institutions (AADFI) </br> AADFI is a pan-African international organisation for Development Finance Institutions created under the auspices of the African Development Bank in 1975. Its mission is to promote co-operation among development finance institutions operating in Africa and in other continents. It has over 82 active member-institutions comprising national and multinational institutions engaged in finance and development activities in Africa. AADFI has its headquarters in Abidjan, Republic of Côte d’Ivoire. It is a member of the World Federation of Development Finance Institutions (WFDFI), and has Observer status at the World Bank. Any Banking or Finance institution may accede to membership of the Association: Ordinary Members comprise African national institutions, Special Member comprise African regional or sub-regional institutions and Honorary Members comprise non-African international institutions.
About Convergence Convergence is an independent institution that connects, educates, and supports investors to execute blended finance transactions that increase private sector investment in emerging markets, and is funded by the Government of Canada, the Ford Foundation and Citi Foundation. Convergence fulfills its mandate through three main activities: 1. Design Funding: Convergence issues grants for practitioners to design catalytic blended finance vehicles that aim to attract private capital to development at scale. 2. Investment Network: Convergence operates an online platform where investors connect with blended finance deals in developing countries, currently with 120 institutions from public, private, and philanthropic sectors. 3. Market Building Tools: Convergence organises workshops and trainings and provides knowledge and data to help investors execute blended finance transactions.