The Sustainable Markets Initiative (SMI) Africa Council launched its African Green Industrial Cities Briefing today during Finance Day at COP29. The briefing presents Africa’s Green Industrial Cities (GICs) as a compelling new asset class with significant investment potential. This move aligns with the COP29 Presidency’s Green Energy Declaration Pledge on Green Energy Zones and Corridors.
Rooted in the Nairobi Declaration, often referred to as Africa’s Green Investment Deal, the document highlights the continent’s essential role in the global green industrial economy. This sector is currently valued at $10 trillion per year and continues to grow. The initiative is also aligned with global market signals, including the EU Green Deal’s Net Zero Industry Act and the U.S. Inflation Reduction Act.
A New Asset Class for Green Growth
Developed through the SMI Africa Council’s Investable Asset Classes Working Group, the GICs represent place-based investment platforms. They are designed to drive Africa’s green industrialization through renewable energy, low-carbon industries, and sustainable infrastructure. The working group received support from legal and professional services firms DLA Piper and WSP.
For institutional investors, this model offers a structured way to enter African markets without shouldering project risks alone. By pooling resources through public-private partnerships, capital can flow into large-scale infrastructure that individual entities might find too complex to manage independently. This approach creates a $3 trillion NDC-aligned investment platform.
The cities are positioned to mobilize private capital to support Africa’s Nationally Determined Contributions (NDCs) and Sustainable Development Goals (SDGs). This advancement aids climate resilience, energy security, and sustainable development across the continent. The aim is to establish Africa as a global green industrial leader.
Mobilizing Capital Through Partnerships
The Institutional Investor-Public Partnerships (IIPPs) framework is central to the GIC model. It unites governments, institutional investors, the private sector, philanthropies, city mayors, and development partners. The goal is to build investment programs that are financially viable, resilient, and risk-adjusted for long-term sustainability.
It is a model that addresses typical barriers such as political and forex risks. Co-investments with African asset owners and long-term, bankable offtake agreements with global and local corporations enhance scalability. These arrangements reduce risk for institutional investors and are aligned with initiatives from the Commonwealth, G20, G7, Inflation Reduction Act, Etihad7, BRICS, and the EU Green Deal.
Dr. Hubert Danso, Co-Chair of the SMI Africa Council and CEO of the Africa Investor Group, urged collective action. He called upon Heads of Government, institutional investors, city mayors, the private sector, philanthropies, and development partners to champion the development of these cities.
“Through Institutional Investor-Public Partnerships, stakeholders can significantly advance Africa’s green economy, creating impactful economic, environmental, and social benefits not only for Africa but the world,” Danso stated.
The Sustainable Markets Initiative was established by King Charles III and launched at Davos. It functions as a CEO-led private sector organization focused on the transition to a sustainable future. The SMI Africa Council was launched in November 2023 in Nairobi, Kenya. It champions scalable collective action by business, finance, and government leaders to benefit people, planet, and nature.
