African Development Bank and Denmark expand partnership on green transition and private capital

The African Development Bank Group (AfDB) and the Government of Denmark have committed to deepening their longstanding cooperation on mobilising private capital, advancing Africa’s green transition and strengthening development finance, according to a press release by the African Development Bank Group. The announcement follows the signing of a memorandum of understanding in September by Bank Group President Dr Sidi Ould Tah and Denmark’s Minister for Foreign Affairs Lars Løkke Rasmussen. The agreement runs through 2030 and is framed around a shared ambition on growth, jobs, energy and opportunities on the African continent. It comes as access to concessional resources tightens for many African countries. The partnership sets out a joint path to translate commitments into finance that reaches countries, businesses and projects driving Africa’s economic transformation.

Climate action and the green transition have been central pillars of the partnership between the Bank Group and Denmark for more than a decade. In 2011, Denmark provided DKK 300 million as a founding contributor to the establishment of the Sustainable Energy Fund for Africa. Denmark has also financed Bank initiatives covering water, infrastructure, urban development and climate-related finance. It has been a shareholder of the African Development Bank since 1982 and a contributor to the African Development Fund since 1973. This record provides the foundation for the new agreement.

A key focus of the agreement is enhanced cooperation on private capital mobilisation, including blended finance, guarantees and risk-sharing. This work will advance through dialogue with the Export and Investment Fund of Denmark and Impact Fund Denmark. The agreement also creates scope to build on the partnership’s record in renewable energy, climate adaptation, water security and green infrastructure. The collaboration will extend beyond finance to include plans to increase exchanges of economic analysis, policy research and technical knowledge. Other areas of focus include job creation, expanding economic opportunities for young people, and strengthening resilience in countries affected by fragility and conflict.

Regular strategic consultations will identify specific programmes and projects where Danish and Bank Group capabilities can be combined. Discussions are also expected to continue the secondment of Danish-funded specialists to the Bank.

“Denmark and the African Development Bank share the same ambition – growth, jobs, energy and opportunities on the African continent,” stated Minister Rasmussen.

He added that he was pleased the two sides had signed the memorandum to strengthen cooperation on these common goals. Dr Ould Tah said that Africa’s financing challenge is not simply about finding more money but about using every source of capital more effectively and directing it towards priorities that can transform economies.

Dr Ould Tah noted that Denmark has shown its willingness to think differently about development finance, from its increased contribution to the African Development Fund to its backing for new financing instruments. Most recently, Denmark was one of the first countries to announce its pledge to the Fund’s seventeenth replenishment, ADF-17, with a commitment of DKK 1.17 billion. That represents a 40 percent increase over its ADF-16 commitment. The task now, Dr Ould Tah said, is to translate that ambition into more capital reaching the countries, businesses and projects that can drive Africa’s economic transformation. The memorandum sets the framework for that work through 2030.