IFC Vice President Sérgio Pimenta : “the green economy creates wealth and opportunity for African businesses”
The 28th Conference of the Parties (COP 28) on climate change is taking place in the United Arab Emirates until December 12. Together with governments, international institutions such as the World Bank Group are calling for greater involvement of the private sector and women. Explanations from Sérgio Pimenta, Regional Vice-President for Africa at the International Finance Corporation (IFC – which, within the World Bank Group, supports development projects involving the private sector).
Interview by Dounia Ben Mohamed
You are attending COP 28. What are the challenges of this conference for the IFC and for Africa in general?
These meetings are always very interesting. They allow us to continue discussions with our development partners, the private companies, to have an ongoing dialogue with civil society, which is very present, and also to discover young entrepreneurs with new ideas and new solutions. It’s always interesting to see innovation from around the world.
The IFC comes to COP 28 with several objectives on its agenda. The first one is to continue the dialogue with the private sector. There are a lot of figures floating around about what is needed to counter the effects of global warming. These funds cannot be provided by the sole public sector. We see an increasingly clear role for the private sector. That is what we are advocating for in Dubai.
The second goal is to strengthen partnerships. Strengthening the ones we have already developed, but also finding new ones so that more and more players are involved in climate solutions. The scale of the challenges is such that no one party can provide all the answers. Everyone needs to work together. We need to think about public-private partnerships to secure funding, notably through blended finance, i.e. financing with some public support, that is used to help reducing the risks on certain projects and create more attractive proposals for the private sector.
This is even more important in Africa. All the solutions we see around the world can be developed on the continent. But sometimes, in smaller markets where it is more difficult to operate at a larger scale, we need additional support to bring those solutions. Our presence at COP 28 will allow us to make progress on these issues.
Financing is at the heart of the discussions. How does the IFC hope to mobilize the private sector?
This is not a new issue. There is an emerging consensus on the role that business should play. More and more companies are starting to put climate change on their agenda. Many initiatives are being taken by the private sector – in terms of decarbonization of manufacturing industries, green financing or energy transition. But we should not divide ourselves into private and public, civil society and so on.
There are many opportunities to green and improve agricultural production in Africa
African countries clearly expressed their expectations in the Nairobi Declaration. How is the IFC responding to their needs?
The Nairobi meeting was an important milestone to prepare for COP 28. It led to the Nairobi Declaration, which proposes ways forward and recommendations. In Dubai, I attended the meeting of the Africa Green Investment Initiative, launched in Nairobi, with several African heads of state, leaders from different sectors and multilateral institutions. The Nairobi message has been taken forward and reinforced. There is a very strong will from African governments to tackle the climate issue and come up with their own solutions. It is not about isolating ourselves from the world, but about involving international partners in these African solutions so that we can take full advantage of the opportunities offered by the green revolution.
IFC works extensively on value chains in Africa’s regional and local economies. The pandemic has accelerated this movement. We now need to look at what creates wealth in the green economy and the opportunities offered to African businesses. There are several examples of this, including African minerals. At the Africa Green Investment Initiative meeting, it was pointed out that many of the minerals that make up a smartphone come from the African continent, but very few are processed locally. We can create value on the continent by producing batteries and solar panels from these resources. This is a real green opportunity that we must seize.
Another example is agriculture. We need to look at ways of making it more environmentally friendly. This is the concept of smart agriculture – to make it more efficient for instance by improving irrigation techniques or sharing data, again with the objective to create more value on the continent. For the smart use of fertilizers, for example, we have an initiative in this area with the OCP group (Office Chérifien des Phosphates) in Morocco. There are many opportunities to green and improve agricultural production on the African continent. Secondly, it’s not just about increasing volumes: let’s do some local processing! For example, IFC supported the cashew nut sector in Côte d’Ivoire, the tea sector in Kenya and the beef sector in Madagascar. If we look at development from a climate perspective, there are huge opportunities for the continent. And I’m delighted that African leaders are moving in this direction. We stand ready to support them.
We believe that the convergence of climate and gender issues is fundamental
Can you give us an example of an IFC-supported solution to support the green economy and small and medium-sized enterprises (SMEs) working in this sector in Africa, an example of a project and its impact?
We are very active in Africa. For fiscal year 2023, we have invested 11.6 billion of dollars, over more than 100 projects taking place in a total of 40 countries in Africa – which is a historic record. I could tell you many stories. I’ll just mention one that is important in the context of the COP and that was announced with great excitement here in Dubai. After launching She WINS Arabia two years ago with the idea of supporting women-led projects, we launched She WINS Africa last June. At COP 28, we launched a global initiative, She WINS Climate. The approach remains the same: to support women entrepreneurs whose activity can have a very high climate impact, in their business endeavors. This will take the form of an annual program with a competition at the end of which we will select several businesses to support in different countries and emerging markets where we operate. In practical terms we will work with incubators, accelerators and venture capital funds to support women – with, in the end, financing for their companies. Africa is the world leader in female entrepreneurship, but it is also the place where there is the biggest gender gap in funding.
We believe that the convergence of climate and gender issues is fundamental. We can’t solve climate problems with just half the world’s population. That’s why we focus on women when it comes to climate. Involving women guarantees greater impact.
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