1 00:00:01,960 --> 00:00:06,120 Speaker 1: Welcome to zero I am Akshatarti this week, Green Africa, 2 00:00:06,519 --> 00:00:19,599 Speaker 1: Rich Africa. Think about what climate change will do to 3 00:00:19,640 --> 00:00:22,040 Speaker 1: the world for just a while, and you will come 4 00:00:22,079 --> 00:00:25,440 Speaker 1: to a devastating realization. Those who have done the least 5 00:00:25,520 --> 00:00:28,080 Speaker 1: to contribute to the problem are going to be the 6 00:00:28,120 --> 00:00:31,880 Speaker 1: worst affected. Africa is home to some of the most 7 00:00:31,920 --> 00:00:35,760 Speaker 1: climate vulnerable countries. One big reason is that it is 8 00:00:35,840 --> 00:00:38,760 Speaker 1: also home to some of the poorest countries in the world. 9 00:00:39,760 --> 00:00:43,040 Speaker 1: But combine those two adversities and you can turn it 10 00:00:43,120 --> 00:00:47,800 Speaker 1: into an opportunity. Helping Africa grow economically can also make 11 00:00:47,840 --> 00:00:52,120 Speaker 1: it more resilient to climate change. Bringing economic growth to 12 00:00:52,200 --> 00:00:56,080 Speaker 1: developing countries is not a new problem for the past century. 13 00:00:56,320 --> 00:00:59,120 Speaker 1: One of the ways that has happened is through multilateral 14 00:00:59,160 --> 00:01:02,720 Speaker 1: development banks. That work began after the Second World War 15 00:01:02,840 --> 00:01:05,480 Speaker 1: with the likes of the World Bank and other institutions 16 00:01:05,680 --> 00:01:09,480 Speaker 1: which were founded by and still sit in rich countries, 17 00:01:10,600 --> 00:01:13,680 Speaker 1: But very soon developing countries wanted to move away from 18 00:01:13,680 --> 00:01:17,240 Speaker 1: the shadow of colonial powers, which is how the African 19 00:01:17,280 --> 00:01:21,399 Speaker 1: Development Bank was founded in nineteen sixty four. It's now 20 00:01:21,440 --> 00:01:22,760 Speaker 1: headquartered in Abijan. 21 00:01:23,160 --> 00:01:23,839 Speaker 2: Quote the war. 22 00:01:24,640 --> 00:01:28,240 Speaker 1: Today, the Bank's challenge is not just economic development, but 23 00:01:28,400 --> 00:01:32,200 Speaker 1: also dealing with the impacts of climate change. At COP 24 00:01:32,200 --> 00:01:35,759 Speaker 1: twenty eight in December, I sat down with akin Wumi Adishina, 25 00:01:36,040 --> 00:01:38,840 Speaker 1: the President of the Bank, to talk about how fifty 26 00:01:38,840 --> 00:01:43,280 Speaker 1: four African countries with enormous differences are dealing with this 27 00:01:43,480 --> 00:01:47,200 Speaker 1: big common challenge. His main tool for finding solutions are 28 00:01:47,240 --> 00:01:51,400 Speaker 1: the somewhat limited financial instruments that he has access to 29 00:01:52,200 --> 00:01:56,840 Speaker 1: and which he deploys creatively, helping reshape wheat farming in Ethiopia, 30 00:01:57,000 --> 00:02:01,000 Speaker 1: setting up solar panels across Burkina Faso, and funding cyclone 31 00:02:01,000 --> 00:02:05,840 Speaker 1: recovery in Malawi. As he told me, Africa has huge 32 00:02:05,840 --> 00:02:09,320 Speaker 1: potential to be green, but it can't be poor and green. 33 00:02:09,680 --> 00:02:14,080 Speaker 1: It needs to be rich and green. What follows is 34 00:02:14,120 --> 00:02:18,040 Speaker 1: a wonkier than usual conversation about the big puzzle Adishina 35 00:02:18,080 --> 00:02:18,880 Speaker 1: is trying to solve. 36 00:02:19,360 --> 00:02:20,320 Speaker 3: But stay with us. 37 00:02:20,480 --> 00:02:24,040 Speaker 1: It is a perspective we rarely hear about or appreciate. 38 00:02:36,520 --> 00:02:38,200 Speaker 3: Doctor ADISHENEV. Welcome to the show. 39 00:02:38,360 --> 00:02:40,320 Speaker 2: Thank you, nice to be with you now. 40 00:02:40,440 --> 00:02:45,400 Speaker 1: The African Development Bank is crucial for ensuring development goals 41 00:02:45,440 --> 00:02:48,880 Speaker 1: in Africa, but these development goals are now being affected 42 00:02:49,160 --> 00:02:52,360 Speaker 1: and perhaps sometimes reversed, by climate change. 43 00:02:53,000 --> 00:02:53,960 Speaker 3: Across the world. 44 00:02:54,480 --> 00:02:59,959 Speaker 1: Development banks have become more sensitive to climate risk. Is 45 00:03:00,120 --> 00:03:02,359 Speaker 1: it played out for your bank? 46 00:03:02,800 --> 00:03:04,680 Speaker 4: Well, you know, if you take a look at it today, 47 00:03:05,720 --> 00:03:09,200 Speaker 4: Africa nine out of ten most vulnerable countries for climate 48 00:03:09,280 --> 00:03:13,440 Speaker 4: change in the world in Africa, and therefore Africa, which 49 00:03:13,480 --> 00:03:17,120 Speaker 4: only contributed no more than three percent of historical emissions, 50 00:03:17,160 --> 00:03:21,240 Speaker 4: now suffers disproportionately from the negative consequences of that. And 51 00:03:21,280 --> 00:03:25,520 Speaker 4: what that really means is Africa loses seven billion dollars 52 00:03:25,600 --> 00:03:28,840 Speaker 4: to fifteen billion dollars a year because of climate change 53 00:03:28,840 --> 00:03:31,840 Speaker 4: and if that currently continues, that's going to reach fifty 54 00:03:31,919 --> 00:03:36,600 Speaker 4: billion dollars by twenty thirty. Obviously, if it didn't cause 55 00:03:36,600 --> 00:03:38,440 Speaker 4: the problem, you have to find it way. The only 56 00:03:38,480 --> 00:03:39,600 Speaker 4: solution you have is to. 57 00:03:39,560 --> 00:03:40,320 Speaker 2: Adapt to it. 58 00:03:40,880 --> 00:03:44,280 Speaker 4: And Africa is not receiving the resources that it needs 59 00:03:44,320 --> 00:03:48,600 Speaker 4: for adaptation. And Africa gets today eleven billion dollars for 60 00:03:48,680 --> 00:03:52,400 Speaker 4: climate adaptation when in fact it needs roughly ten times 61 00:03:52,480 --> 00:03:56,440 Speaker 4: higher than that. But as Africa's premier financial institution, our 62 00:03:56,520 --> 00:03:59,400 Speaker 4: role as African Development Bank is to respond to that. 63 00:04:00,080 --> 00:04:03,360 Speaker 4: What we're doing right now is that we've devoted forty 64 00:04:03,360 --> 00:04:05,920 Speaker 4: four percent of all of our financing as a bank 65 00:04:06,160 --> 00:04:09,680 Speaker 4: to climate finance and also the world said we should 66 00:04:09,720 --> 00:04:11,600 Speaker 4: do climate finance and do climate adaptation. 67 00:04:11,800 --> 00:04:13,920 Speaker 2: Well, we passed that three years ago. 68 00:04:14,360 --> 00:04:17,000 Speaker 4: Today we ad sixty seven percent of all of our 69 00:04:17,000 --> 00:04:20,920 Speaker 4: climate finance go to adaptation, which is Africa's main challenge. 70 00:04:20,920 --> 00:04:23,279 Speaker 4: So as Africa and Development Bank, we're putting our money 71 00:04:23,360 --> 00:04:24,240 Speaker 4: where our maps are. 72 00:04:24,400 --> 00:04:26,920 Speaker 1: And let's just talk through numbers. How much is it 73 00:04:26,960 --> 00:04:29,400 Speaker 1: that you are able to land on an annual basis. 74 00:04:29,680 --> 00:04:32,160 Speaker 1: You've talked to the ratio of what you're lending to 75 00:04:32,400 --> 00:04:35,080 Speaker 1: when it comes to total projects, forty four percent going 76 00:04:35,120 --> 00:04:38,240 Speaker 1: to climate, of that sixty seven percent going to adaptation. 77 00:04:38,680 --> 00:04:41,839 Speaker 1: But what is the total quantum and what is the 78 00:04:41,880 --> 00:04:44,880 Speaker 1: gap that if you had more money you could be 79 00:04:44,920 --> 00:04:45,480 Speaker 1: filling up. 80 00:04:45,760 --> 00:04:47,440 Speaker 4: You know, if you take a look at the total 81 00:04:47,480 --> 00:04:50,720 Speaker 4: amount of financing that we do roughly every year, it's 82 00:04:50,760 --> 00:04:53,640 Speaker 4: about ten billion dollars and so we do forty percent 83 00:04:53,720 --> 00:04:56,080 Speaker 4: of that straight goes to climate finance and then we 84 00:04:56,160 --> 00:04:59,880 Speaker 4: split it up. It's quite significant for Africa, but we 85 00:05:00,000 --> 00:05:03,159 Speaker 4: we need to mobilize more resources at scale, and that's 86 00:05:03,200 --> 00:05:06,039 Speaker 4: why the African Development Bank launched what was called the 87 00:05:06,120 --> 00:05:10,960 Speaker 4: Africa Adaptation Acceleration Program, which is to mobilize twenty five 88 00:05:11,080 --> 00:05:15,159 Speaker 4: billion dollars for climate adaptation in Africa together with the 89 00:05:15,200 --> 00:05:19,200 Speaker 4: Global Center not Adaptation, and that is the largest climate 90 00:05:19,200 --> 00:05:23,080 Speaker 4: adaptation program in the world. Okay, And we've put down 91 00:05:23,560 --> 00:05:26,640 Speaker 4: twelve point five billion dollars from the African Development Bank. 92 00:05:26,640 --> 00:05:28,880 Speaker 4: Now we're trying to mobilize the additional twelve point five 93 00:05:28,880 --> 00:05:29,600 Speaker 4: billion dollars. 94 00:05:29,760 --> 00:05:30,920 Speaker 2: This is very crucial. 95 00:05:30,960 --> 00:05:35,040 Speaker 4: That adaptation is a forgotten causing of mitigation, so we've 96 00:05:35,080 --> 00:05:37,480 Speaker 4: got to do a lot more on that. But in 97 00:05:37,520 --> 00:05:41,159 Speaker 4: addition to that, you know, countries also just like you 98 00:05:41,200 --> 00:05:43,560 Speaker 4: and I have to buy insurance and ensure ourselves against 99 00:05:43,640 --> 00:05:47,200 Speaker 4: catastrophe events. Were actually doing the same also for countries. 100 00:05:47,680 --> 00:05:51,479 Speaker 4: So we were running a program called Africa Disaster Risk 101 00:05:51,560 --> 00:05:56,080 Speaker 4: Insurance Facility, which is ensuring countries against catastrophargis events. We 102 00:05:56,120 --> 00:05:59,039 Speaker 4: did in Madagascar when they had droughts, they were able 103 00:05:59,080 --> 00:06:01,040 Speaker 4: to get a payout because as we were paid in 104 00:06:01,120 --> 00:06:04,240 Speaker 4: short for them. They paid six hundred thousand farmers who 105 00:06:04,279 --> 00:06:07,280 Speaker 4: lost their cross because of that. When Malawi had three 106 00:06:07,360 --> 00:06:11,960 Speaker 4: years consecutive drafts and then a cyclone, we were able 107 00:06:12,000 --> 00:06:14,480 Speaker 4: to pay them out to get a payment of fifty 108 00:06:14,560 --> 00:06:17,560 Speaker 4: two million dollars which they used to pay for several 109 00:06:17,640 --> 00:06:20,599 Speaker 4: millions of farmers. So these are the critical things that 110 00:06:20,640 --> 00:06:23,480 Speaker 4: we are doing to protect Africa and allow you to 111 00:06:23,560 --> 00:06:25,240 Speaker 4: be able to adapt to climate change. 112 00:06:25,480 --> 00:06:29,440 Speaker 1: Now, those are payouts that are you able to recover 113 00:06:29,520 --> 00:06:33,880 Speaker 1: them because they sound like grants, whereas in your case 114 00:06:33,960 --> 00:06:35,719 Speaker 1: a lot of the money that you do to give 115 00:06:35,760 --> 00:06:39,400 Speaker 1: out is through lending. So how do you recover some 116 00:06:39,480 --> 00:06:42,440 Speaker 1: of this money which is absolutely crucial given out at 117 00:06:42,440 --> 00:06:43,520 Speaker 1: the time that is needed. 118 00:06:44,440 --> 00:06:47,599 Speaker 4: No, actually, we know we it's in our interest to 119 00:06:47,640 --> 00:06:50,480 Speaker 4: help them to do that because if we don't and 120 00:06:50,520 --> 00:06:52,599 Speaker 4: they have shocks that they don't recover from, they're going 121 00:06:52,680 --> 00:06:54,840 Speaker 4: to default on other loans that we actually give them. 122 00:06:54,880 --> 00:06:57,159 Speaker 4: So yes, they are grants that we have that we 123 00:06:57,279 --> 00:06:59,919 Speaker 4: give to insure them, and we think that that also 124 00:07:00,160 --> 00:07:02,640 Speaker 4: several benefits. First and foremost is that if physical space 125 00:07:02,680 --> 00:07:05,280 Speaker 4: is so limited they don't have you know, they are 126 00:07:05,279 --> 00:07:07,719 Speaker 4: responding to climatey and responding to debt, they are responding 127 00:07:07,760 --> 00:07:10,520 Speaker 4: to pandemics and so on, that's not enough physical space 128 00:07:10,520 --> 00:07:12,520 Speaker 4: for them to have additional money to ensure themselves. 129 00:07:12,600 --> 00:07:13,640 Speaker 2: So we do that. 130 00:07:13,760 --> 00:07:17,120 Speaker 4: And secondly, because we ensure them many CONTs at the 131 00:07:17,160 --> 00:07:19,160 Speaker 4: same time, we pay fifty percent of the insurance. By 132 00:07:19,200 --> 00:07:22,440 Speaker 4: the way premiums for them, we can crowd others in. 133 00:07:22,760 --> 00:07:24,720 Speaker 4: We increase the size of the market and the unique 134 00:07:24,720 --> 00:07:28,320 Speaker 4: price of Actually the premiums eventually will go down and 135 00:07:28,360 --> 00:07:30,480 Speaker 4: they will be able to do that by themselves. 136 00:07:30,920 --> 00:07:36,680 Speaker 1: Going forward, now on the Adaptation Acceleration program, twenty five 137 00:07:36,720 --> 00:07:39,000 Speaker 1: billion dollars is the target, but I understand there are 138 00:07:39,040 --> 00:07:41,600 Speaker 1: already projects that have been funded and worked on. 139 00:07:41,680 --> 00:07:43,160 Speaker 3: Could you talk through a few examples. 140 00:07:43,200 --> 00:07:46,600 Speaker 4: Well, first INFEMOST where we program called Technologies for African 141 00:07:46,640 --> 00:07:51,760 Speaker 4: Adaptation AG Cultural Transformation. So in Ethiopia, for example, we 142 00:07:51,840 --> 00:07:55,880 Speaker 4: were able to deploy heat tolerant what varieties to Ethiopian farmers. 143 00:07:56,080 --> 00:07:58,600 Speaker 4: Heat a wit, as you know, is a it's a 144 00:07:58,640 --> 00:08:01,160 Speaker 4: temperate crop. It's not a hat florian crop. But we 145 00:08:01,160 --> 00:08:03,120 Speaker 4: were able to get the right technologies and we gave 146 00:08:03,120 --> 00:08:05,920 Speaker 4: you to those farmers through the program. What happened They 147 00:08:06,200 --> 00:08:10,360 Speaker 4: cultivated those hit tolerant wheat varieties on five thousand hectors 148 00:08:10,360 --> 00:08:13,800 Speaker 4: in twenty eighteen. This year they grew them on two 149 00:08:13,920 --> 00:08:17,920 Speaker 4: million hectors. So that made Ethiopy our self sufficient in 150 00:08:17,960 --> 00:08:22,320 Speaker 4: wheat on that four years. Today they're a net exporter 151 00:08:22,480 --> 00:08:25,400 Speaker 4: of wheat because of the program that we've done for them. 152 00:08:25,640 --> 00:08:26,880 Speaker 2: I'll give you another example. 153 00:08:27,240 --> 00:08:32,720 Speaker 4: When drought hit farmers in Malawi, Zambia and also in Zimbabwe, 154 00:08:33,120 --> 00:08:37,200 Speaker 4: we deployed through our program water efficient maids. You know, 155 00:08:37,400 --> 00:08:40,080 Speaker 4: the crop there is basically maize, and so we deployed 156 00:08:40,080 --> 00:08:43,320 Speaker 4: that to them and they were cultivated by five point 157 00:08:43,679 --> 00:08:48,240 Speaker 4: four million households, right, and that is what saped the 158 00:08:48,360 --> 00:08:51,280 Speaker 4: entire region from a disaster doing that. So these are 159 00:08:51,400 --> 00:08:54,120 Speaker 4: programs that are happening at scale. And that's why we 160 00:08:54,200 --> 00:08:57,680 Speaker 4: as an African Development Bank created a facility that's called 161 00:08:57,679 --> 00:09:02,960 Speaker 4: Climate Action Window under the African Development Funding. So we 162 00:09:03,000 --> 00:09:06,160 Speaker 4: open up a window four hundred and twenty nine million dollars. 163 00:09:06,360 --> 00:09:09,920 Speaker 4: These added things you're going to get. First, twenty million 164 00:09:09,960 --> 00:09:15,160 Speaker 4: farmers will get crop insurance and livestock insurance. You have 165 00:09:15,240 --> 00:09:18,439 Speaker 4: another twenty million farmers that will also be able to 166 00:09:18,480 --> 00:09:22,880 Speaker 4: get access to the climate resident technologies. Roughly ten million 167 00:09:22,880 --> 00:09:26,400 Speaker 4: people will have access to water and sanitation and health services. 168 00:09:26,720 --> 00:09:30,240 Speaker 4: A million hectors of degraded land will be rejuvenated, and 169 00:09:30,360 --> 00:09:32,280 Speaker 4: nine point five million people will have access to re 170 00:09:32,320 --> 00:09:34,920 Speaker 4: eneable energy. And so this is really the key thing 171 00:09:34,960 --> 00:09:36,400 Speaker 4: and what we are trying to do now is to 172 00:09:36,440 --> 00:09:39,640 Speaker 4: take that to scale, because to adapt to climate change 173 00:09:39,720 --> 00:09:42,640 Speaker 4: you don't need loans to do that. You actually need 174 00:09:42,679 --> 00:09:47,680 Speaker 4: to mobilize cheap grants to allow you to adapt to 175 00:09:47,760 --> 00:09:49,800 Speaker 4: climate change. And that's what we are trying to do. 176 00:09:51,360 --> 00:09:55,480 Speaker 1: So this twenty five billion dollar program is that all 177 00:09:55,559 --> 00:09:57,000 Speaker 1: grants towards adaptation. 178 00:09:57,840 --> 00:09:59,600 Speaker 2: All these are all towards adaptation. 179 00:10:00,440 --> 00:10:02,959 Speaker 3: Yes, but it's all grunts, yes, okay. 180 00:10:03,120 --> 00:10:05,960 Speaker 1: And the remaining twelve point five billion dollars that you 181 00:10:06,080 --> 00:10:07,720 Speaker 1: do need to still raise. 182 00:10:08,400 --> 00:10:09,839 Speaker 3: Where do you think that can come from? 183 00:10:09,960 --> 00:10:10,520 Speaker 2: Well, we are. 184 00:10:10,440 --> 00:10:12,720 Speaker 4: Talking to quite a lot of philanthropies right now to 185 00:10:12,800 --> 00:10:15,280 Speaker 4: help us raise the money for that. We are also 186 00:10:15,360 --> 00:10:18,680 Speaker 4: talking to other development finance institutions, so join us so 187 00:10:18,720 --> 00:10:20,040 Speaker 4: that we can syndicate around that. 188 00:10:20,400 --> 00:10:21,040 Speaker 2: You know, it. 189 00:10:20,960 --> 00:10:23,720 Speaker 4: Doesn't have to be all our money. It's just about 190 00:10:23,760 --> 00:10:25,280 Speaker 4: how we work together to be able to. 191 00:10:25,200 --> 00:10:28,960 Speaker 1: Do that, and the goal is to try and spend 192 00:10:29,000 --> 00:10:32,280 Speaker 1: that money by twenty thirty. Have twenty five billion dollars 193 00:10:32,320 --> 00:10:35,480 Speaker 1: worth of adaptation grants being given out between now and 194 00:10:35,559 --> 00:10:36,199 Speaker 1: twenty thirty. 195 00:10:36,600 --> 00:10:39,320 Speaker 4: That is absolutely correct. It's not all of that that's grant. 196 00:10:39,480 --> 00:10:43,120 Speaker 4: Some of it also our loans that go into helping 197 00:10:43,160 --> 00:10:46,800 Speaker 4: you to climate proof your infrastructure, for example, what's your 198 00:10:46,800 --> 00:10:49,840 Speaker 4: water system, what's your energy system or buildings, or to 199 00:10:49,960 --> 00:10:53,520 Speaker 4: even repair damage infrastructure, whether it's is your road or 200 00:10:53,600 --> 00:10:57,679 Speaker 4: energy transmission system that's been damaged because of cyclones. 201 00:10:57,200 --> 00:10:58,559 Speaker 3: Or plauds now. 202 00:10:58,600 --> 00:11:02,240 Speaker 1: We talked a lot about adaptation, but Africa also has 203 00:11:02,320 --> 00:11:06,720 Speaker 1: a tremendous potential for renewables. There is a goal about 204 00:11:06,760 --> 00:11:11,640 Speaker 1: tripling global renewable energy capacity. Africa could probably do more 205 00:11:11,720 --> 00:11:16,000 Speaker 1: than tripling. What is your focus on trying to enable 206 00:11:17,080 --> 00:11:22,719 Speaker 1: mitigation projects, enable energy access projects through the deployment of renewables. 207 00:11:23,000 --> 00:11:26,360 Speaker 4: You know, we are the largest investor right now in 208 00:11:26,360 --> 00:11:30,800 Speaker 4: in Africa today as a bank, we devote eighty seven 209 00:11:30,840 --> 00:11:35,440 Speaker 4: percent of all of our financing and energy to reenable energy, 210 00:11:35,840 --> 00:11:40,320 Speaker 4: so that is wind, hydro, geotomo and of course solar, 211 00:11:40,360 --> 00:11:42,760 Speaker 4: which we have in our bonders and a good example 212 00:11:42,880 --> 00:11:45,840 Speaker 4: of that is what we are doing in the sahel Okay. 213 00:11:46,160 --> 00:11:50,920 Speaker 4: We are financing right now a twenty billion dollar program 214 00:11:51,360 --> 00:11:54,720 Speaker 4: that is called Deserto Power that is going to construct 215 00:11:54,800 --> 00:11:58,199 Speaker 4: ten thousand megaworts of solar power across eleven countries of 216 00:11:58,240 --> 00:12:01,880 Speaker 4: the sail that will provide electricity for two hundred and 217 00:12:01,880 --> 00:12:05,920 Speaker 4: fifty million people right and when we're done, it's going 218 00:12:05,960 --> 00:12:09,160 Speaker 4: to be the largest solar zone in the world. And 219 00:12:09,200 --> 00:12:11,480 Speaker 4: it's already started. It's not something we're thinking about. We've 220 00:12:11,480 --> 00:12:14,040 Speaker 4: already started at in Mali, We've started it in Nije, 221 00:12:14,240 --> 00:12:18,880 Speaker 4: We've started it also in Bukina, Faso and child and 222 00:12:18,960 --> 00:12:22,319 Speaker 4: so that is going to be a very major transformitted 223 00:12:22,400 --> 00:12:26,440 Speaker 4: project that we are doing. But also we are investing 224 00:12:26,480 --> 00:12:30,440 Speaker 4: heavily in hydro projects in other places. Take for example, 225 00:12:30,520 --> 00:12:33,800 Speaker 4: we are the mandated Leida Ranger for the one thousand, 226 00:12:33,840 --> 00:12:38,640 Speaker 4: five hundred mega words in Pandakua project, a hydro in Mozambique. 227 00:12:38,840 --> 00:12:40,959 Speaker 4: If you take a look at Zambia, for example, they 228 00:12:41,000 --> 00:12:44,160 Speaker 4: have what they call Batoka god A link Bozambique and Zimbabwe. 229 00:12:44,679 --> 00:12:47,120 Speaker 4: We invested in that. And think of what we also 230 00:12:47,280 --> 00:12:50,680 Speaker 4: invested in in Morocco you have what is called the 231 00:12:50,800 --> 00:12:55,240 Speaker 4: New Wazata which is the world's largest concentrated solar power plant. 232 00:12:55,520 --> 00:12:58,040 Speaker 4: It was also finance of the African Development Bank, so 233 00:12:58,080 --> 00:12:58,360 Speaker 4: we are. 234 00:12:58,360 --> 00:12:58,960 Speaker 2: Big on that. 235 00:12:59,040 --> 00:13:04,240 Speaker 4: But the issue is how do you use energy to 236 00:13:04,360 --> 00:13:08,520 Speaker 4: drive in dossualization. And I make the case that Africa 237 00:13:08,640 --> 00:13:11,960 Speaker 4: needs to use is natural gas to be able to 238 00:13:12,040 --> 00:13:16,160 Speaker 4: have a stable energy mix. See, the most important thing 239 00:13:16,240 --> 00:13:19,160 Speaker 4: is access to energy. You have to have security of 240 00:13:19,240 --> 00:13:22,880 Speaker 4: energy and stability of energy, and without having something like gas, 241 00:13:22,880 --> 00:13:24,840 Speaker 4: we are not going to be able to do that. 242 00:13:25,200 --> 00:13:27,640 Speaker 4: And when I say that, I also want to say 243 00:13:28,080 --> 00:13:30,840 Speaker 4: that that's not going to contribute anything at all to 244 00:13:30,880 --> 00:13:35,360 Speaker 4: global emissions. Because the analysis that was done shows that 245 00:13:35,440 --> 00:13:39,600 Speaker 4: even if today Africa were to use all of its 246 00:13:39,679 --> 00:13:42,600 Speaker 4: natural gas for energy, you know how much it will 247 00:13:42,640 --> 00:13:47,199 Speaker 4: contribute to global emissions less than zero point six percent. 248 00:13:47,960 --> 00:13:51,079 Speaker 4: And so therefore Africa, which has six hundred million people 249 00:13:51,080 --> 00:13:54,880 Speaker 4: without electricity, will use all of its enable energy will 250 00:13:54,880 --> 00:13:59,440 Speaker 4: optimize that. But I don't get carried away. There must 251 00:13:59,440 --> 00:14:02,240 Speaker 4: be stable reach for which natural gas will play very 252 00:14:02,240 --> 00:14:05,840 Speaker 4: significant roles without adding anything at all to global emissions. 253 00:14:10,480 --> 00:14:13,679 Speaker 1: After the break, how the African Development Bank is enticing 254 00:14:13,720 --> 00:14:17,880 Speaker 1: developed nations to invest in the continent. And by the way, 255 00:14:18,040 --> 00:14:20,080 Speaker 1: if you like this episode, please take a moment to 256 00:14:20,160 --> 00:14:24,400 Speaker 1: rate or review the show on Apple Podcasts and Spotify. 257 00:14:29,760 --> 00:14:32,040 Speaker 1: Your bank also has a plan to figure out a 258 00:14:32,080 --> 00:14:36,640 Speaker 1: way to increase your capitalization through rechanneling what are known 259 00:14:36,720 --> 00:14:41,840 Speaker 1: as the special drawing rights now SDRs. Are a complicated beasts, 260 00:14:41,880 --> 00:14:45,680 Speaker 1: but basically they are accessible to the largest economies in 261 00:14:45,720 --> 00:14:50,280 Speaker 1: the largest amounts. Those economies, such as the UK, could 262 00:14:50,360 --> 00:14:53,400 Speaker 1: try and give some of those rights that they get 263 00:14:53,480 --> 00:14:56,760 Speaker 1: through the World Bank and give those two development banks 264 00:14:56,800 --> 00:15:01,240 Speaker 1: like yours. This has been a conversation that has heated 265 00:15:01,320 --> 00:15:04,920 Speaker 1: up over the past twelve months or eighteen months. Where 266 00:15:04,920 --> 00:15:09,600 Speaker 1: do things stand today and do you have any countries 267 00:15:09,600 --> 00:15:12,200 Speaker 1: that have committed to rechannel their SDRs. 268 00:15:13,720 --> 00:15:15,680 Speaker 4: My first and foremost is that we have to start 269 00:15:15,720 --> 00:15:20,760 Speaker 4: our conversation by recognizing that these are conditional financial instruments 270 00:15:20,760 --> 00:15:23,960 Speaker 4: that were issued to help the world deal with COVID 271 00:15:24,080 --> 00:15:26,200 Speaker 4: and all of the problems with climate change and all 272 00:15:26,240 --> 00:15:26,760 Speaker 4: the others. 273 00:15:27,160 --> 00:15:28,360 Speaker 2: But herece we had a challenges. 274 00:15:28,640 --> 00:15:33,000 Speaker 4: At six hundred and fifty billion dollars were issued and Africa, 275 00:15:33,440 --> 00:15:37,360 Speaker 4: a population size or one point four billion people, got 276 00:15:37,440 --> 00:15:39,040 Speaker 4: only thirty three billion dollars. 277 00:15:39,160 --> 00:15:39,640 Speaker 2: What of that? 278 00:15:39,800 --> 00:15:43,680 Speaker 4: I applaud everything about especially doing rights. I applaud all 279 00:15:43,680 --> 00:15:46,120 Speaker 4: the airports be made by IMF. I also applaud the 280 00:15:46,120 --> 00:15:48,480 Speaker 4: airports of Secretary Yelling the United States who called for 281 00:15:48,520 --> 00:15:49,200 Speaker 4: it to be used. 282 00:15:49,400 --> 00:15:51,160 Speaker 2: But the faculty the matter is that it did not. 283 00:15:51,120 --> 00:15:54,320 Speaker 4: Stave Africa well, but we know that we can get 284 00:15:54,360 --> 00:15:57,320 Speaker 4: more juice out of the same oranges if you actually 285 00:15:57,320 --> 00:16:00,000 Speaker 4: did things well. And so we came up with a model, 286 00:16:00,600 --> 00:16:03,720 Speaker 4: the African Development Bank and the Inti American Development Bank 287 00:16:04,040 --> 00:16:07,800 Speaker 4: to see how those rich countries that got the svs, 288 00:16:07,840 --> 00:16:10,840 Speaker 4: which we actually don't need it right, can only channel 289 00:16:10,880 --> 00:16:14,840 Speaker 4: those through banks like ourselves, the African Development Bank, the 290 00:16:15,000 --> 00:16:17,480 Speaker 4: entire American Development Bank and why not or the most 291 00:16:17,560 --> 00:16:18,720 Speaker 4: laterally development banks. 292 00:16:21,320 --> 00:16:25,359 Speaker 1: Let's pause here to acknowledge that SDRs are very complicated, 293 00:16:25,840 --> 00:16:28,360 Speaker 1: but here's what you need to know to understand how 294 00:16:28,440 --> 00:16:32,360 Speaker 1: this financial instrument can unlock more money for Africa's needs. 295 00:16:33,520 --> 00:16:36,960 Speaker 1: SDR is an international reserve asset which was created in 296 00:16:37,040 --> 00:16:42,400 Speaker 1: nineteen sixty nine. SDR stands for special Drawing Rights. Special 297 00:16:42,480 --> 00:16:46,160 Speaker 1: because it's only to be used in special circumstances, such 298 00:16:46,200 --> 00:16:49,760 Speaker 1: as the economic crisis set off by the COVID nineteen pandemic. 299 00:16:50,840 --> 00:16:53,920 Speaker 1: Drawing because it's drawing from a pool of money that 300 00:16:54,040 --> 00:16:58,360 Speaker 1: sits with the International Monetary Fund. Rights because shareholders of 301 00:16:58,440 --> 00:17:01,280 Speaker 1: the IMF have the right to draw on the money, 302 00:17:01,720 --> 00:17:05,760 Speaker 1: but only as a proportion of their shareholding in the IMF. 303 00:17:07,040 --> 00:17:10,359 Speaker 1: SDRs were created as a safety net for countries facing 304 00:17:10,440 --> 00:17:14,240 Speaker 1: economic hardship, and what Ardishina is trying to do is 305 00:17:14,280 --> 00:17:17,040 Speaker 1: find a way for countries that don't need that safety 306 00:17:17,080 --> 00:17:21,560 Speaker 1: net to reallocate their SDRs to the African Development Bank. 307 00:17:25,640 --> 00:17:27,080 Speaker 2: Three things are very critical in this. 308 00:17:27,480 --> 00:17:31,800 Speaker 4: First, it's great value for money because for every dollar 309 00:17:31,880 --> 00:17:34,840 Speaker 4: of seis that's real channels. Let's say to the African 310 00:17:34,880 --> 00:17:39,239 Speaker 4: Development Bank, we can leverage that by four terms. The 311 00:17:39,280 --> 00:17:41,440 Speaker 4: second one is that if you take a look at 312 00:17:41,560 --> 00:17:45,560 Speaker 4: the issue of what this means for taxpayers of those 313 00:17:45,600 --> 00:17:49,080 Speaker 4: countries because the reserve assets, well actually they cause the 314 00:17:49,080 --> 00:17:53,040 Speaker 4: taxpayers of those absolutely zero because the African Development Bank 315 00:17:53,240 --> 00:17:56,600 Speaker 4: we will pay the fees right for using the seers 316 00:17:56,800 --> 00:17:57,520 Speaker 4: to the IMF. 317 00:17:57,800 --> 00:17:58,960 Speaker 2: So that's the second one. 318 00:17:59,119 --> 00:18:02,199 Speaker 4: And the third one, which is actually quite important, is 319 00:18:02,200 --> 00:18:05,679 Speaker 4: that you don't lose your reserve because the motel that 320 00:18:05,720 --> 00:18:09,240 Speaker 4: we have actually preserves the reserve as a status of 321 00:18:09,320 --> 00:18:13,160 Speaker 4: the SDRs, and so there's nothing lost. You can always 322 00:18:13,160 --> 00:18:15,719 Speaker 4: claim your SDRs anytime you want, and just to make 323 00:18:15,760 --> 00:18:17,800 Speaker 4: sure you can get it back anytime you want it, 324 00:18:18,119 --> 00:18:21,560 Speaker 4: we created a liquidity support agreement to be attached to 325 00:18:21,640 --> 00:18:24,600 Speaker 4: those who make the real location. So let's say they 326 00:18:24,600 --> 00:18:27,560 Speaker 4: are five countries that make the real location that would 327 00:18:27,600 --> 00:18:30,600 Speaker 4: be a liquidity support facility that's joined to that that 328 00:18:30,680 --> 00:18:34,359 Speaker 4: should day for any reason have a balance of payment challenge. 329 00:18:34,400 --> 00:18:36,159 Speaker 4: And these are no countries that are not only going 330 00:18:36,240 --> 00:18:39,600 Speaker 4: to have the balance of payment challenge anyway, somebody is 331 00:18:39,600 --> 00:18:41,080 Speaker 4: going to be able to ensure that you will get 332 00:18:41,119 --> 00:18:44,240 Speaker 4: your money back. And so this is phenomenal. If we 333 00:18:44,400 --> 00:18:47,720 Speaker 4: got ten billion dollars REA channel to the African Development 334 00:18:47,760 --> 00:18:50,399 Speaker 4: Bank or the each American Development Bank, let's say for us, 335 00:18:51,240 --> 00:18:55,639 Speaker 4: that will automatically become for Africa forty billion dollars. That 336 00:18:55,800 --> 00:19:01,320 Speaker 4: is a lot of money to deal with water, education, sanitation, food, energy, 337 00:19:01,520 --> 00:19:04,320 Speaker 4: and infrastructure, the kin that we also care quite a 338 00:19:04,320 --> 00:19:08,160 Speaker 4: lot about. But you have also known that they've been 339 00:19:08,160 --> 00:19:14,040 Speaker 4: asking us to think big and go from billions to trillions. Well, 340 00:19:14,920 --> 00:19:17,159 Speaker 4: the fastest way you're going to go to trillions is 341 00:19:17,760 --> 00:19:21,480 Speaker 4: if you are able. Let's say you issued SDRs what 342 00:19:22,200 --> 00:19:26,960 Speaker 4: five hundred billion dollars through the Motilateral Development Bank, and 343 00:19:27,040 --> 00:19:30,840 Speaker 4: they can use their business models triple areata financial institutions 344 00:19:30,960 --> 00:19:34,920 Speaker 4: preferred creadial status to leverage that four times. That becomes 345 00:19:35,000 --> 00:19:37,320 Speaker 4: two trillion dollars. Problem done. 346 00:19:37,640 --> 00:19:37,800 Speaker 1: You know. 347 00:19:38,080 --> 00:19:41,159 Speaker 4: So, I think that motilateral development banks are going to 348 00:19:41,160 --> 00:19:45,439 Speaker 4: play critical role in how we take latent assets that 349 00:19:45,520 --> 00:19:48,760 Speaker 4: are sitting there and we turn those into dynamic assets 350 00:19:48,840 --> 00:19:52,120 Speaker 4: that can actually then begin to really drive development. Are 351 00:19:52,119 --> 00:19:56,280 Speaker 4: climate and development at scale, And I feel that if 352 00:19:56,320 --> 00:19:59,000 Speaker 4: we are able to get that done, maybe we might 353 00:19:59,040 --> 00:20:06,879 Speaker 4: consider even calling that SDR supporting development revitalization. Then you 354 00:20:07,119 --> 00:20:09,439 Speaker 4: really making it to work for the ordinary person on 355 00:20:09,480 --> 00:20:09,879 Speaker 4: the street. 356 00:20:10,800 --> 00:20:15,400 Speaker 1: Rebranding done right, Well, talk me through the last point 357 00:20:15,400 --> 00:20:17,320 Speaker 1: you made. It sounds like it's a win win win. 358 00:20:17,440 --> 00:20:20,719 Speaker 1: You figured out a way in which countries that have 359 00:20:21,280 --> 00:20:25,080 Speaker 1: large amounts of SDRs available can rea channel those to you. 360 00:20:25,440 --> 00:20:27,800 Speaker 4: If we change the world here, we change the world. 361 00:20:28,040 --> 00:20:31,119 Speaker 4: It will support how we deal with climate issues, de 362 00:20:31,240 --> 00:20:34,640 Speaker 4: we water issues, de we health issues, prepare the world 363 00:20:34,640 --> 00:20:37,120 Speaker 4: for the next pandemic. We allow us to be able 364 00:20:37,119 --> 00:20:40,440 Speaker 4: to support programs that allow young people to be able 365 00:20:40,440 --> 00:20:44,080 Speaker 4: to have jobs. The impacts are quite significant, you know, so, 366 00:20:44,200 --> 00:20:46,679 Speaker 4: I think the beauty of this is that we finally 367 00:20:46,720 --> 00:20:49,800 Speaker 4: have a tool we are asked to have, the matilateral 368 00:20:49,880 --> 00:20:53,080 Speaker 4: development banks and the globe of financial architecture to change 369 00:20:53,119 --> 00:20:56,840 Speaker 4: the architecture. Okay, fine, change the architecture but you got 370 00:20:56,840 --> 00:20:59,320 Speaker 4: to change the plumbing. You've got to change also the 371 00:21:00,119 --> 00:21:02,359 Speaker 4: use of your instruments. If the instruments are still the 372 00:21:02,400 --> 00:21:05,200 Speaker 4: same and the building is different, we haven't done much. 373 00:21:05,200 --> 00:21:05,960 Speaker 2: So I'm really. 374 00:21:05,800 --> 00:21:09,359 Speaker 4: Excited with how closely the African Development Bank and ENTI 375 00:21:09,400 --> 00:21:12,159 Speaker 4: American Development Bank are working with the imail from this, 376 00:21:12,840 --> 00:21:17,159 Speaker 4: because you need a world that is climate resilient, but 377 00:21:17,640 --> 00:21:20,520 Speaker 4: the bread and butter issues of development. 378 00:21:21,520 --> 00:21:22,920 Speaker 2: Cannot wait for that. 379 00:21:23,160 --> 00:21:25,760 Speaker 4: People have to eat, people have to drink, kids have 380 00:21:25,800 --> 00:21:27,879 Speaker 4: to go to school, people have to have good health, 381 00:21:28,160 --> 00:21:30,159 Speaker 4: you know, so you can't say, look, I'm dealing with 382 00:21:30,160 --> 00:21:31,920 Speaker 4: the climate and everybody is dying. 383 00:21:32,240 --> 00:21:34,680 Speaker 1: Who do you need to convince to make the rechanneling 384 00:21:34,720 --> 00:21:36,240 Speaker 1: of SDRs happen. 385 00:21:37,160 --> 00:21:39,080 Speaker 2: Yeah, we need to convince the countries. 386 00:21:39,800 --> 00:21:44,119 Speaker 4: I think politically we have the support of the African Union, 387 00:21:44,600 --> 00:21:46,960 Speaker 4: the G seven is very supportive of it, Indian statement, 388 00:21:47,040 --> 00:21:50,240 Speaker 4: so is G twenty. But we just need to have 389 00:21:50,359 --> 00:21:53,200 Speaker 4: a few countries, no more than five countries to come 390 00:21:53,240 --> 00:21:55,240 Speaker 4: to the table and help us make it happen. We 391 00:21:55,320 --> 00:21:57,639 Speaker 4: are talking to a few of them right now and 392 00:21:57,680 --> 00:22:00,199 Speaker 4: I think that those are the ones that you have 393 00:22:00,240 --> 00:22:02,919 Speaker 4: to convince that can put the money down and make 394 00:22:02,960 --> 00:22:03,399 Speaker 4: it happen. 395 00:22:03,480 --> 00:22:06,240 Speaker 1: Now, let's talk through the idea of hybrid capital or 396 00:22:06,400 --> 00:22:07,280 Speaker 1: blended capital. 397 00:22:07,359 --> 00:22:07,840 Speaker 3: There is. 398 00:22:09,600 --> 00:22:13,200 Speaker 1: A lot of expectation for private capital that is interested 399 00:22:13,240 --> 00:22:17,960 Speaker 1: in investing in emerging economies, but they remain shy. They 400 00:22:18,000 --> 00:22:21,280 Speaker 1: say there are too many risks, political risk, currency risks, 401 00:22:21,520 --> 00:22:24,800 Speaker 1: sovereign risks, all kinds of risks to make it possible 402 00:22:24,800 --> 00:22:27,200 Speaker 1: for us to invest in those countries. Can you please 403 00:22:27,280 --> 00:22:29,720 Speaker 1: help de risk some of these projects? And they want 404 00:22:29,760 --> 00:22:32,120 Speaker 1: to bring that money either from development banks or from 405 00:22:32,119 --> 00:22:36,960 Speaker 1: philanthropies or directly from develop country governments. Have you seen 406 00:22:37,040 --> 00:22:40,040 Speaker 1: any of those blended finance projects working in Africa? Have 407 00:22:40,080 --> 00:22:43,359 Speaker 1: you participated in any of those? And what have you 408 00:22:43,440 --> 00:22:46,200 Speaker 1: learned that could be applied to try and scale this idea. 409 00:22:46,359 --> 00:22:49,359 Speaker 4: Well, we have the largest blended finance facilities in Africa 410 00:22:49,600 --> 00:22:52,439 Speaker 4: because that's what we do as African Development Bank. We 411 00:22:52,560 --> 00:22:56,760 Speaker 4: deploy significant amounts of partial risk guarantees and partial credit 412 00:22:56,760 --> 00:23:01,480 Speaker 4: guarantees to ensure transactions with governments in which the counterparty 413 00:23:01,520 --> 00:23:03,040 Speaker 4: is the government and you want to do risk it, 414 00:23:03,080 --> 00:23:04,159 Speaker 4: we give you a partial. 415 00:23:03,960 --> 00:23:05,120 Speaker 2: Risk guarantee instrument. 416 00:23:05,440 --> 00:23:08,080 Speaker 4: If your counterparty here is a private sector, then we 417 00:23:08,160 --> 00:23:11,120 Speaker 4: give you a Pastia credit guarantee instrument. They work at 418 00:23:11,160 --> 00:23:15,879 Speaker 4: scales significantly. We use a partial credit guarantee facility of 419 00:23:15,920 --> 00:23:19,040 Speaker 4: about three hundred and fifty million dollars to support Egypt 420 00:23:19,320 --> 00:23:22,520 Speaker 4: to issue a five hundred million dollar Panda bond on 421 00:23:22,119 --> 00:23:25,040 Speaker 4: the on the Chinese capitol markets, which it is using 422 00:23:25,080 --> 00:23:29,400 Speaker 4: now to support water, sanitation and other clean energy. Were 423 00:23:29,400 --> 00:23:33,240 Speaker 4: support in Code de Vore to also issue five hundred 424 00:23:33,720 --> 00:23:37,119 Speaker 4: million euros through a guarantee that we provide as a 425 00:23:37,160 --> 00:23:40,320 Speaker 4: triple A erated financial institution. We've done that in beIN 426 00:23:40,359 --> 00:23:42,560 Speaker 4: In they raise four hundred million dollars. We're doing that 427 00:23:42,600 --> 00:23:44,960 Speaker 4: in Senegal now, and we do it for Tanzania. That's 428 00:23:44,960 --> 00:23:47,720 Speaker 4: a big project. That is a three point six billion 429 00:23:47,760 --> 00:23:52,479 Speaker 4: dollar project railway that links Tanzania to DRC Congo and 430 00:23:52,560 --> 00:23:56,160 Speaker 4: to Burundi, and they needed to derisk that and so 431 00:23:56,200 --> 00:23:59,320 Speaker 4: we are putting together a risk guarantee facility for that. 432 00:24:00,119 --> 00:24:05,320 Speaker 4: Let me also say that sometimes people exaggerate the issue 433 00:24:05,320 --> 00:24:07,560 Speaker 4: of risk of investment in Africa. 434 00:24:07,680 --> 00:24:12,000 Speaker 2: You know, just believe what the fact says. Take a 435 00:24:12,000 --> 00:24:12,520 Speaker 2: look at. 436 00:24:12,400 --> 00:24:16,680 Speaker 4: The Moody's analytics need an assessment looking at the risk 437 00:24:16,720 --> 00:24:21,320 Speaker 4: of the fault on infrastructure loans globally and guess what 438 00:24:21,400 --> 00:24:24,240 Speaker 4: they found that the risk of the fall on infrastructure 439 00:24:24,440 --> 00:24:27,320 Speaker 4: in Africa is probably about two point five percent. 440 00:24:27,600 --> 00:24:28,760 Speaker 2: It's much more lower. 441 00:24:28,920 --> 00:24:31,280 Speaker 4: Is the lowest in the world compared to Latin America, 442 00:24:31,320 --> 00:24:35,120 Speaker 4: compared to Europe, and compared to the Caribbean, Pacific and Asia, 443 00:24:35,560 --> 00:24:38,680 Speaker 4: and so Africa is not as risky as people think. 444 00:24:39,119 --> 00:24:41,320 Speaker 2: Just last month, we have what's called. 445 00:24:41,119 --> 00:24:43,520 Speaker 4: The Africa Investment Forum, which is a forum that the 446 00:24:43,520 --> 00:24:46,919 Speaker 4: African Development Band put together that brings bank abook projects 447 00:24:46,920 --> 00:24:49,120 Speaker 4: to the table that de risk those projects and therefore 448 00:24:49,400 --> 00:24:51,600 Speaker 4: attract investors. 449 00:24:51,119 --> 00:24:52,520 Speaker 2: From around the world. 450 00:24:52,680 --> 00:24:57,280 Speaker 4: In less than seventy two hours, we had secured investment 451 00:24:57,359 --> 00:25:01,440 Speaker 4: interest for projects in Africa what party four point eight 452 00:25:02,240 --> 00:25:06,200 Speaker 4: billion dollars in less than seventy two hours. So that 453 00:25:06,359 --> 00:25:10,639 Speaker 4: ranges from infrastructure to transport, to energy, to water, sanitation, 454 00:25:10,720 --> 00:25:14,359 Speaker 4: agriculture and also ai a whole range of things. So 455 00:25:14,760 --> 00:25:16,720 Speaker 4: I think what I'm saying to you is that the 456 00:25:16,840 --> 00:25:21,399 Speaker 4: instrument exists, the platform exists to reduce your transaction costs, 457 00:25:21,440 --> 00:25:24,200 Speaker 4: your risks, and we have the facilities to do blended 458 00:25:24,240 --> 00:25:28,320 Speaker 4: finance at scale for energy today reneable energy in Africa. 459 00:25:28,640 --> 00:25:30,600 Speaker 4: We have a fund that's caused or s enabled Energy 460 00:25:30,600 --> 00:25:33,919 Speaker 4: Fund for Africa. It's a blended finance facility that brings 461 00:25:33,960 --> 00:25:37,200 Speaker 4: down the cost of capital la stage capital for those 462 00:25:37,240 --> 00:25:40,560 Speaker 4: that are in the reneabled energy space. And also we 463 00:25:40,800 --> 00:25:44,879 Speaker 4: just launched what's called Alliance for Grain Infrastructure in Africa, 464 00:25:44,920 --> 00:25:47,320 Speaker 4: which will mobilize ten billion dollars with a lot of 465 00:25:47,400 --> 00:25:50,560 Speaker 4: blended finance to bring down the cost of developing grain 466 00:25:50,640 --> 00:25:52,360 Speaker 4: infrastructure in Africa. 467 00:25:52,440 --> 00:25:55,280 Speaker 1: So as you stand at this moment with a number 468 00:25:55,280 --> 00:25:59,560 Speaker 1: of reason which you can deploy capital for development issues 469 00:25:59,600 --> 00:26:02,760 Speaker 1: that will we'll also make the continent resilient to a 470 00:26:02,800 --> 00:26:06,080 Speaker 1: lot of climate impacts that are sadly going to come 471 00:26:06,119 --> 00:26:09,760 Speaker 1: its way. What are your greatest needs, What is the 472 00:26:09,800 --> 00:26:12,439 Speaker 1: case that you need to make and to whom to 473 00:26:12,600 --> 00:26:15,160 Speaker 1: ensure that you can keep doing this work and at 474 00:26:15,160 --> 00:26:16,879 Speaker 1: a greater scale than ever before. 475 00:26:16,960 --> 00:26:19,080 Speaker 4: Well, first, it's I think it's very important for the 476 00:26:19,080 --> 00:26:22,800 Speaker 4: shareholders to support us very strongly and their do to 477 00:26:22,880 --> 00:26:25,840 Speaker 4: be able to squeeze more from the lemon that we have. 478 00:26:26,000 --> 00:26:29,760 Speaker 4: And so the African Development Bank we deploy all types 479 00:26:29,840 --> 00:26:34,520 Speaker 4: of financial innovations to do that give value for money. 480 00:26:34,680 --> 00:26:36,879 Speaker 4: We freed up a billion dollars which again gave us 481 00:26:36,920 --> 00:26:39,440 Speaker 4: a headroom to lend more. Then we did another one 482 00:26:39,520 --> 00:26:43,320 Speaker 4: last year which is a two billion dollar syntetis scretization, 483 00:26:43,520 --> 00:26:47,520 Speaker 4: again the first in the world by a multilateral financial institution, 484 00:26:47,960 --> 00:26:52,200 Speaker 4: where we took risks of our portfolio of private sovereign 485 00:26:52,240 --> 00:26:55,000 Speaker 4: portfolio to government and we transfer that to the private 486 00:26:55,040 --> 00:26:57,800 Speaker 4: sector which support from the UK government a one point 487 00:26:57,800 --> 00:27:01,520 Speaker 4: six billion dollar guarantee and also insured as on the 488 00:27:01,880 --> 00:27:05,119 Speaker 4: insurance market for four hundred million dollars and that freed 489 00:27:05,200 --> 00:27:08,200 Speaker 4: up two billion dollars for us. So all I'm saying 490 00:27:08,280 --> 00:27:10,840 Speaker 4: is the African Development Bank we need a lot of 491 00:27:10,840 --> 00:27:13,159 Speaker 4: support to be able to do more of that, so 492 00:27:13,240 --> 00:27:14,919 Speaker 4: that we can get a lot more guarantees to be 493 00:27:14,960 --> 00:27:18,400 Speaker 4: able to leverage more and also to support a lot 494 00:27:18,440 --> 00:27:21,880 Speaker 4: of support for the hybrid capital through the SDR would 495 00:27:21,880 --> 00:27:25,600 Speaker 4: be fantastic. And finally, it's callible capital. You know, if 496 00:27:25,600 --> 00:27:27,800 Speaker 4: you have a lot more calible capital, you can do 497 00:27:27,920 --> 00:27:28,480 Speaker 4: a lot more. 498 00:27:29,960 --> 00:27:33,840 Speaker 1: To pause here, you heard Ardishina say the word capital 499 00:27:34,040 --> 00:27:37,399 Speaker 1: a lot of times. That's because there are different types 500 00:27:37,440 --> 00:27:40,600 Speaker 1: of capital that enable the African Development Bank to do 501 00:27:40,720 --> 00:27:44,680 Speaker 1: its work. The two main types at play here are 502 00:27:44,960 --> 00:27:49,040 Speaker 1: paid in capital, also known as paid up capital, which 503 00:27:49,080 --> 00:27:52,520 Speaker 1: is money that the bank's being given by its shareholders, 504 00:27:52,920 --> 00:27:57,080 Speaker 1: which in this case is many many countries. The other type, 505 00:27:57,200 --> 00:28:00,560 Speaker 1: callible capital, is money that is not yet in hand 506 00:28:00,880 --> 00:28:04,440 Speaker 1: but can be made available from these same shareholders in 507 00:28:04,480 --> 00:28:08,040 Speaker 1: case the bank really needs it. Having more paid in 508 00:28:08,119 --> 00:28:10,600 Speaker 1: capital means that the bank can do a lot more, 509 00:28:10,920 --> 00:28:14,080 Speaker 1: which is why I wanted to know if AFP anticipates 510 00:28:14,119 --> 00:28:15,520 Speaker 1: getting more paid in capital. 511 00:28:22,720 --> 00:28:25,200 Speaker 4: But even in general capture increase of the bank, all 512 00:28:25,200 --> 00:28:28,080 Speaker 4: of the most laterally development banks, you want us to 513 00:28:28,080 --> 00:28:30,920 Speaker 4: do more, we will squeeze as much as we want 514 00:28:30,960 --> 00:28:33,159 Speaker 4: in terms of room to run or in terms of 515 00:28:33,760 --> 00:28:35,679 Speaker 4: sweating as balance sheet as we say it. 516 00:28:36,000 --> 00:28:38,440 Speaker 2: But you know, if you sweat. 517 00:28:37,880 --> 00:28:40,800 Speaker 4: So much and you are not drinking water, you're going 518 00:28:40,840 --> 00:28:42,280 Speaker 4: to get your head with it at one point. 519 00:28:42,280 --> 00:28:43,440 Speaker 2: So we need a lot more water. 520 00:28:43,760 --> 00:28:46,600 Speaker 4: And that water is actually for us to have paid 521 00:28:46,600 --> 00:28:49,400 Speaker 4: in capital, which allows us to use that risk capital 522 00:28:49,680 --> 00:28:53,000 Speaker 4: to leverage the private sector that has one forty five 523 00:28:53,040 --> 00:28:56,000 Speaker 4: trillion dollars of assets on the management. We need to 524 00:28:56,000 --> 00:28:59,480 Speaker 4: be able to leverage a lot of that into infrastructure 525 00:29:00,080 --> 00:29:03,880 Speaker 4: in Africa, energy, into all the things that will enable 526 00:29:04,040 --> 00:29:09,880 Speaker 4: energy and also food production and all of that in Africa, and. 527 00:29:09,840 --> 00:29:12,360 Speaker 1: We didn't talk about paid in capital, but do you 528 00:29:12,400 --> 00:29:14,880 Speaker 1: see any movement? I know you said your shareholders are 529 00:29:14,920 --> 00:29:17,160 Speaker 1: very supportive of the work you're doing and clearly or 530 00:29:17,480 --> 00:29:19,880 Speaker 1: they're squeezing the lemon as hard as they can. But 531 00:29:20,520 --> 00:29:22,480 Speaker 1: have you made the case for more paident capital and 532 00:29:22,520 --> 00:29:23,320 Speaker 1: will that come through? 533 00:29:23,800 --> 00:29:27,400 Speaker 4: Well, you know, the innovations that we actually have right 534 00:29:27,440 --> 00:29:31,240 Speaker 4: now that ranges from whether we're using balance sheet optimization 535 00:29:31,320 --> 00:29:35,040 Speaker 4: models or whether we are doing stetic secretization colible capital 536 00:29:35,440 --> 00:29:39,840 Speaker 4: or temporary colible capital or general capital increase all the 537 00:29:39,960 --> 00:29:43,400 Speaker 4: SR hybrid capital. We model that that will allow us 538 00:29:43,520 --> 00:29:48,240 Speaker 4: to be able to raise about seventy one billion dollars additionally, 539 00:29:48,520 --> 00:29:53,200 Speaker 4: which is very very significant. But also we have another innovation. 540 00:29:53,680 --> 00:29:55,360 Speaker 4: You know, I was telling you Alia in the show 541 00:29:56,160 --> 00:29:59,479 Speaker 4: about the list developed countries that depend on the African 542 00:29:59,520 --> 00:30:00,400 Speaker 4: Development Fund. 543 00:30:00,960 --> 00:30:02,640 Speaker 2: Those ones the only ones. 544 00:30:02,520 --> 00:30:04,720 Speaker 4: That actually need a lot more money because you know, 545 00:30:04,800 --> 00:30:07,720 Speaker 4: the j Chad Mali all these countries. And so we 546 00:30:07,840 --> 00:30:11,440 Speaker 4: have a fund that's called the African Development Fund and 547 00:30:11,520 --> 00:30:15,880 Speaker 4: we have equity in it, what twenty five billion dollars 548 00:30:16,080 --> 00:30:18,400 Speaker 4: And so now part of the financial innovations we're doing 549 00:30:18,480 --> 00:30:21,200 Speaker 4: is taking that equity now going to the capitol markets 550 00:30:21,400 --> 00:30:25,440 Speaker 4: to raise an additional twenty seven billion dollars of low 551 00:30:25,920 --> 00:30:29,360 Speaker 4: interest rate money, long term money to support their development. 552 00:30:29,560 --> 00:30:31,800 Speaker 4: So these are the kind of instruments that we need. 553 00:30:32,000 --> 00:30:34,720 Speaker 4: But when it comes to the issue of general capital, yes, 554 00:30:34,800 --> 00:30:38,720 Speaker 4: you know, our shareholders are fantastic African Development Bank. Our 555 00:30:38,840 --> 00:30:43,800 Speaker 4: shareholders gave it a significant increasing general capital, moving us 556 00:30:43,840 --> 00:30:47,840 Speaker 4: from ninety three a billion dollar bank to become a 557 00:30:47,840 --> 00:30:50,720 Speaker 4: two hundred and eight billion dollar capital bank, which is 558 00:30:51,680 --> 00:30:54,320 Speaker 4: massive for US. But I think they are also mindful 559 00:30:55,160 --> 00:30:57,680 Speaker 4: that it challenges are big. We're looking now towards the 560 00:30:57,720 --> 00:31:01,120 Speaker 4: ten year strategy of the bank and as we talk 561 00:31:01,160 --> 00:31:04,520 Speaker 4: about bigger, better Boulder Bank, I will expect that our 562 00:31:04,560 --> 00:31:07,760 Speaker 4: shareholders at the right time will also have to look 563 00:31:07,800 --> 00:31:09,960 Speaker 4: at the issue of genera capital increase. 564 00:31:11,200 --> 00:31:13,720 Speaker 1: There's a lot of conversation about getting more funds to 565 00:31:13,800 --> 00:31:17,160 Speaker 1: developing countries. Are you finding it any easier to get 566 00:31:17,240 --> 00:31:21,480 Speaker 1: private capital interested in investing in Africa? Is there action 567 00:31:21,600 --> 00:31:24,520 Speaker 1: to match the rhetoric that's being made in general from 568 00:31:24,680 --> 00:31:31,680 Speaker 1: private capital to invest large amounts of money towards African countries. 569 00:31:31,960 --> 00:31:35,520 Speaker 4: No, I think there are challenges for those that want 570 00:31:35,560 --> 00:31:39,080 Speaker 4: to invest. General perception, as I said, the passive risk 571 00:31:39,280 --> 00:31:42,320 Speaker 4: is much higher than the real risk of investing in Africa. 572 00:31:42,520 --> 00:31:45,200 Speaker 4: I just told you that in four years of having 573 00:31:45,200 --> 00:31:48,040 Speaker 4: the Africa Investment Forum, we've been able to mobilize one 574 00:31:48,120 --> 00:31:52,200 Speaker 4: seventy seven billion dollars of investment interest to various projects 575 00:31:52,240 --> 00:31:54,760 Speaker 4: in Africa. I don't want to minimize the issue of risk, 576 00:31:54,840 --> 00:31:57,760 Speaker 4: you know. Our job is to make capital comfortable, you know, 577 00:31:57,880 --> 00:32:00,840 Speaker 4: and to make it comfortable. Whether it is market risk, 578 00:32:01,240 --> 00:32:04,560 Speaker 4: we can actually help with that, whether it is countries 579 00:32:04,600 --> 00:32:09,240 Speaker 4: that want to invest, but currency exchange risk problem exists. 580 00:32:09,320 --> 00:32:12,320 Speaker 4: We lend quite a lot also in local currency for that. 581 00:32:12,800 --> 00:32:17,280 Speaker 4: And also the issue is when you talk about private sector, 582 00:32:18,360 --> 00:32:22,239 Speaker 4: they ask the question where are the projects? Where are 583 00:32:22,240 --> 00:32:25,240 Speaker 4: the bank cable projects? And that's why the African Development 584 00:32:25,240 --> 00:32:29,240 Speaker 4: Bank invests in another vehicle which is called Africa fifty. 585 00:32:29,520 --> 00:32:33,880 Speaker 4: It's a private equity type vehicle. That is job is 586 00:32:33,920 --> 00:32:38,440 Speaker 4: to help to develop bankable projects and also to be 587 00:32:38,480 --> 00:32:41,400 Speaker 4: able to finance those bankable projects. You know, right now 588 00:32:41,400 --> 00:32:43,720 Speaker 4: it is capital is about one billion dollars in being 589 00:32:43,760 --> 00:32:44,440 Speaker 4: able to do that. 590 00:32:44,800 --> 00:32:45,760 Speaker 2: And we also at the. 591 00:32:45,680 --> 00:32:50,560 Speaker 4: African Development Bank have our own project preparation facility which 592 00:32:50,600 --> 00:32:54,960 Speaker 4: is called Neper Infrastructure Preparation Facility, where we use roughly 593 00:32:55,000 --> 00:32:59,280 Speaker 4: twenty six million dollars to prepare projects that are bankable 594 00:32:59,720 --> 00:33:02,120 Speaker 4: which have been able to mobilize more. 595 00:33:01,960 --> 00:33:04,000 Speaker 2: Than fifty billion dollars downstream. 596 00:33:04,360 --> 00:33:07,360 Speaker 4: So the point I'm basic basically saying is that the 597 00:33:07,440 --> 00:33:10,440 Speaker 4: capital is there, but that capital needs to be matched 598 00:33:10,480 --> 00:33:14,080 Speaker 4: with bankable projects. That capital has to be derisked, and 599 00:33:14,200 --> 00:33:17,400 Speaker 4: also there has to be supportive more supportive let me say, 600 00:33:17,760 --> 00:33:22,560 Speaker 4: policy and regulatory environments and political stability that reduces the 601 00:33:22,600 --> 00:33:25,640 Speaker 4: political risk of private capital moving to those markets. And 602 00:33:25,680 --> 00:33:28,480 Speaker 4: I think that Africa clearly is the place to be, 603 00:33:28,920 --> 00:33:31,600 Speaker 4: you know, for anybody wanting to make investment. You know, 604 00:33:31,840 --> 00:33:34,560 Speaker 4: the numbers are staggering. You take a look at it. 605 00:33:34,640 --> 00:33:37,240 Speaker 4: A population of one point four billion people that will 606 00:33:37,280 --> 00:33:40,120 Speaker 4: grow to two point four billion people by twenty fifty. 607 00:33:40,200 --> 00:33:43,040 Speaker 4: They actually would consume quite a lot as a big market. 608 00:33:43,080 --> 00:33:47,360 Speaker 4: You cannot ignore the largest population of youth in the world. 609 00:33:47,480 --> 00:33:48,640 Speaker 2: It's in Africa. 610 00:33:48,720 --> 00:33:50,880 Speaker 4: If you're looking at how to feed the world, sixty 611 00:33:50,880 --> 00:33:54,920 Speaker 4: five percent of all the uncultivated ariblel and left in 612 00:33:54,960 --> 00:33:57,720 Speaker 4: the world is in Africa. So what Africa does with 613 00:33:57,760 --> 00:34:00,440 Speaker 4: agriculture all the time in the future of food, and 614 00:34:00,480 --> 00:34:03,600 Speaker 4: everybody is talking about energy transition. Well for that, you 615 00:34:03,760 --> 00:34:06,960 Speaker 4: actually need electric vehicles, you need battery energy story systems. 616 00:34:07,080 --> 00:34:09,799 Speaker 4: Well for that, you need platinum, you need copper, you 617 00:34:09,840 --> 00:34:13,680 Speaker 4: need cobalt, you need lidium. Africa dominates in access to 618 00:34:13,719 --> 00:34:17,840 Speaker 4: all of this, and so again the issue is Africa 619 00:34:17,920 --> 00:34:21,440 Speaker 4: is going to play very critical role in that energy 620 00:34:21,440 --> 00:34:24,560 Speaker 4: transition drive. But what I don't want to make sure 621 00:34:24,640 --> 00:34:32,400 Speaker 4: Africa doesn't do. Again's Africa simply exporting it's raw metals, 622 00:34:32,520 --> 00:34:37,399 Speaker 4: just like it has always been exporting its raw agricultural commodities. 623 00:34:38,040 --> 00:34:44,120 Speaker 4: Because when you export raw commodities, it's the door to poverty. 624 00:34:45,239 --> 00:34:48,399 Speaker 4: But when you actually add value with good value change 625 00:34:48,400 --> 00:34:51,840 Speaker 4: and you are integrated into global value change, that is 626 00:34:51,880 --> 00:34:58,320 Speaker 4: the high way to wealth. And Africa cannot be poor green. 627 00:34:58,480 --> 00:35:00,520 Speaker 4: Africa needs to be rich. 628 00:35:01,000 --> 00:35:02,360 Speaker 3: Great, wonderful. 629 00:35:02,600 --> 00:35:12,719 Speaker 1: Thank you so much, Thank you very much, Thank you 630 00:35:12,719 --> 00:35:15,320 Speaker 1: for listening to Zero. If you liked this episode, please 631 00:35:15,360 --> 00:35:17,120 Speaker 1: take a moment to rate or review the show on 632 00:35:17,200 --> 00:35:20,920 Speaker 1: Apple Podcasts and Spotify. Share this episode with a friend 633 00:35:21,120 --> 00:35:25,000 Speaker 1: or with someone who is into financial jargon. You can 634 00:35:25,000 --> 00:35:27,439 Speaker 1: get in touch at zero pod at Bloomberg dot net 635 00:35:28,239 --> 00:35:32,440 Speaker 1: zero's producers are mightily Rau, Magnus Hendrickson and Oscar boyd 636 00:35:33,480 --> 00:35:36,640 Speaker 1: Our theme music is composed by wonderly Special thanks to 637 00:35:36,719 --> 00:35:38,880 Speaker 1: Kira bindram I am Akshadrati. 638 00:35:39,080 --> 00:35:39,719 Speaker 4: Back soon.