Compact with Africa

More private investment for Africa

German Chancellor Angela Merkel hosted the Compact with Africa (CwA) Conference in Berlin on 19 November 2019. Opportunities to improve the framework conditions for business and investment in the CwA countries were discussed together with the heads of state and governments of the participating African countries and with the international organisations involved.

During the German term of G20 presidency in 2017, the “Compact with Africa” (CwA) was founded to promote private investments and trade in Africa. The initiative brings together African countries, international organisations and bilateral partners of the G20 and beyond. The CwA’s primary objective is the improvement of the framework conditions to coordinate country-specific reform plans, to launch and manage infrastructure projects and to create jobs. So far, twelve African countries have joined the initiative: Benin, Burkina Faso, Côte d’Ivoire (Ivory Coast), Egypt, Ethiopia, Ghana, Guinea, Morocco, Rwanda, Senegal, Togo and Tunisia.

 



Video: “Compact with Africa”

“Compact with Africa” Facility

At the CwA Conference in Berlin, Federal Environment Minister Svenja Schulze presented the CwA Facility, which the BMU will set up jointly with the World Bank/IFC in the coming weeks. The CwA Facility is supported by the International Climate Initiative (IKI).

The CwA Facility supports so-called incubator centres and green start-ups in Africa. The incubator centres advise small business entrepreneurs and facilitate their access to private capital through innovative financing instruments such as blended finance and results-based finance. This mobilises financial resources from private investors and supports local financial sector stakeholders. The investments create jobs and income in line with sustainability and climate objectives.

IKI Projects in CwA countries

The IKI is active in all twelve CwA countries, supporting bilateral, regional and global projects on climate protection, the conservation of forests and biological diversity. The total funding volume of the current bilateral projects amounts to EUR 95 million. Ongoing bilateral cooperation exists with five CwA countries (Ethiopia, Ghana, Morocco, Rwanda & Tunisia). The other countries are currently not being bilaterally funded, but they are part of multi-country projects in Africa or worldwide (Egypt, Benin, Burkina Faso, Côte d’Ivoire, Guinea, Senegal, Togo).

In North Africa, IKI bilateral cooperation primarily focuses on supporting projects in climate impact mitigation, such as financing the establishment of a climate competence centre in Morocco and the scaling up of renewable energies in Tunisia. In West Africa, the focus is mainly on the “green sector”, so the portfolio comprises a large number of projects for the restoration of landscapes and the protection of biodiversity, such as a project to restore degraded cocoa plantations and forest ecosystems in Ghana; yet another project to restore forests and landscapes in Rwanda is being supported through the testing of investment packages. The IKI also supports a bilateral project aimed at restoring degraded coffee landscapes in Ethiopia, the only East African CwA country.

In keeping with the idea of Compact with Africa, IKI also supports projects to build capacity and involve the private sector, if the projects are conducive to climate protection or to the protection of biodiversity. One particular current focus is on a capacity-building project for improved coastal and marine management in the 21 countries of the Abidjan Convention.

 

Header Photos: Deutsche Welle / Dan Hirschfeld, Deutsche Welle / Gerlind Vollmer, IUCN, Bruno D' Amicis