Africa investor (Ai), in collaboration with the African Green Infrastructure Investment Bank (AfGIIB), DLA Piper and the CFA Asset Owners Council (AoC), has launched the Model Law on Institutional Investor-Public Partnerships (ML-IIPP) at COP27, designed to facilitate the deployment of trillions of dollars of private capital, into Nationally Determined Contribution (NDC) and ‘green’ infrastructure programmes and projects across the continent. The launch presentation took place at COP27, during the Africa investor (Ai) NDC Investment Summit and Awards, held in collaboration with the African Union Development Agency (AUDA), The NDC Partnership, The International Energy Agency (IEA) and The International Chamber of Commerce (ICC).
At COP26, the current legal and regulatory frameworks of Africa and other emerging markets, were stated as a key investment barrier by global and domestic institutional investors that represent over $150trn. In response we announced we would deliver an Institutional Investor-Public Partnerships Model Law and present it at COP27, the result of which is our 130 page model law, designed to facilitate the fast tracking, de-risking and scaling of private capital’s participation into NDC, ‘green’ infrastructure investment programmes and ’green’ infrastructure projects, through the formation of Institutional Investor-Public Partnerships (IIPPs) across Africa and the implementation of the concept of Early Investor Involvement’. The ML-IIPP is available via the DLA Piper website to governments who wish to implement the ML-IIPP into their statutory framework and institutional investors who want to invest in these projects.
The ML-IIPP was drafted and informed through extensive stakeholder engagement, in order to understand the particular challenges and objectives which needed to be addressed, together with the lessons learned from previous projects. Stakeholders included representatives from the public sector, the development finance community, domestic and global investors, and consultancies advising these entities.
The International Energy Agency (IEA) has highlighted that fostering the financial conditions for a rapid deployment of clean energy in Africa, is one of the defining challenges of our times and that the creation of new legal and regulatory frameworks will help tackle many cross-cutting issues to enable the mobilisation and deployment of private capital at scale and at speed. This need is great. Africa is required to mobilise $3trn in order to meet its Nationally Determined Contribution (NDC) projects by 2030. Put into context, the whole world has only managed to mobilise $2.8trn for renewable energy investments over the past 20 years, with Africa only receiving 2% of that global sum.
Dr. Hubert Danso, CEO and Chairman Africa investor (Ai) and Chairman, African Green Infrastructure Investment Bank (AfGIIB) added:
“The legal and regulatory architecture in its current form, is incapable of delivering the demands and needs of NetZero targets, in terms of capital formation at scale, and accelerated capital deployment – fostered through fast tracked procurement, and an unprecedented acceleration of financial close (rate and volume), for bankable and investable green public and private infrastructure projects and programmes. We are therefore delighted to have partnered with DLA Piper, The African Green Infrastructure Investment Bank and the CFA Asset Owners Council, on this innovative Model Law initiative, designed to stimulate greater public-private finance mandate alignment and more catalytic private investment pathways, that fast track, de-risk and scale, private capital’s participation in African NDC and green infrastructure investments, implemented through Institutional Investor-Public Partnerships (IIPPs).”
Dr. Sharon Fitzgerald, partner at DLA Piper and one of the authors of the Model Law, commented:
“The environmental challenges facing African countries are immense. The continent needs to mobilise more climate finance and investment in the next eight years, than the entire world has managed over the past twenty years. It is against this backdrop that DLA Piper, alongside its valued partners, are excited to introduce a Model Law that will hopefully go some way to addressing these challenges. It will enable the use of a newly designed regulatory framework that will support and encourage governments and global institutional investors to work together to deliver ‘green’ infrastructure investment programmes and ’green’ infrastructure projects which will facilitate the delivery of African countries NDC commitments, to the ultimate benefit of us all.”