A shared commitment to SDG7 energy investments in Africa
The African Energy Guarantee Facility (AEGF) is an initiative launched by the European Investment Bank (EIB), Munich Re and the African Trade Insurance Agency. The target is to increase the availability of long-term insurance capacity for energy projects to meet the UN’s Sustainable Development Goal #7 of access to affordable, reliable and sustainable energy for all by 2030.
In January of 2020, KfW signed a European Fund for Sustainable Development (EFSD) guarantee agreement that makes KfW a co-guarantor of AEGF. As a result of KfW’s commitment, AEGF’s de-risking capacity for SEforALL-approved energy projects in Africa was increased to USD 1 billion.
Instrumental support from the EU-Africa Infrastructure Trust Fund
The African Energy Guarantee Facility has benefitted from the technical assistance support of the EU-Africa Infrastructure Trust Fund and the Cotonou III subsidy envelope. This support has been instrumental in the development and implementation of the AEGF.
The European Investment Bank (EIB), the world's largest international public lender, is a publicly owned financial institution whose shareholders are the EU member states. Established in 1958 to serve the EU, it is also a major force for sustainable development in the world. In 2020 the EIB provided EUR 5 billion for new private and public investment across Africa. This represented the largest annual EIB engagement in 55 years of operations on the continent and the largest support for climate action and investment in fragile states.
Financing and technical support provided by the EIB in Africa last year is backing more than EUR 12 billion of new investment to improve agriculture, access to off-grid renewable energy and accelerating rural electrification, affordable housing, communications, climate resilience and climate insurance for small holders, healthcare and private sector access to finance.
Munich Re Group, one of the world's largest reinsurers, has become the go-to reinsurer when it comes to creating innovative solutions and forging new partnerships. Active in Africa for over 50 years, Munich Re sees AEGF as a blueprint for risk-sharing between reinsurers, primary insurers and international financial institutions to actively support energy projects in the region.
KfW is one of the world´s leading and most experienced promotional banks. Established in 1948 as a public law institution, KfW is owned 80 per cent by the Federal Republic of Germany and 20 per cent by the federal states (“Länder”).
KfW Development Bank is Germany’s leading development bank and an integral part of KfW. The more than 600 personnel at headquarters and 370 specialists in its 68 local offices cooperate with partners all over the world. Its goal is to combat poverty, secure the peace, protect the environment and the climate and make globalisation fair. KfW is a competent and strategic advisor on current development issues.
The African Trade Insurance Agency (ATI), established in 2001 provides insurance against political and commercial risks to attract foreign direct investments. ATI closed 2019 year with exposures of US$6.4 billion, posting record results for the eighth consecutive year with 132% growth on the net profit over 2018. Since its inception, ATI has supported investments and trade into Africa totaling USD 62 bn. ATI holds an ‘A‘ rating from S&P and an ‘A3‘ rating from Moody’s.