Edinburgh partner at DLA Piper helps unlock trillions for African climate projects
DLA Piper has launched its Model Law on Institutional Investor-Public Partnerships (ML-IIPP) initiative aimed at helping African policymakers facilitate the deployment of trillions of dollars of private capital into domestic green infrastructure programmes and projects.
The Model Law was led by Dr Sharon Fitzgerald, a partner in DLA Piper’s Edinburgh office, in collaboration with the African Green Infrastructure Investment Bank (AfGIIB), Africa investor (Ai) and the CFA Asset Owners Council (AoC).
The document was developed following COP26 in Glasgow last year, where the current legal and regulatory frameworks in Africa, and other emerging markets, were highlighted as key investment barriers by global and domestic investors, representing over $150 trillion in capital reserves. It aims to streamline these frameworks to facilitate the fast tracking, de-risking and scaling of private capital investment in Africa’s net zero projects.
Dr Fitzgerald said: “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 20 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’ Nationally Determined Contribution (NDC) commitments, to the ultimate benefit of us all.”
The 130-page paper was developed 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.
Dr Hubert Danso, chairman of the African Green Infrastructure Investment Bank (AfGIIB), added: “We are delighted to be partnering with DLA Piper on this innovative Model Law initiative. It has met its overarching goal of designing greater public-private finance mandate alignment and fostering more catalytic private investment pathways, that fast track, de-risk and scale private capital participation in African NDC and green infrastructure investments, implemented through Institutional Investor-Public Partnerships (IIPPs).”
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 time and that the creation of new legal and regulatory frameworks will enable the mobilisation and deployment of private capital at scale and speed.
Africa is required to mobilise $3trn to meet its NDC projects by 2030. Put into context, every country across the globe has only managed to mobilise $2.8trn for renewable energy investments over the past 20 years, with Africa only receiving two per cent of that sum.
The ML-IIPP is available via the DLA Piper website for both governments aiming to implement the ML-IIPP into statutory frameworks, and institutional investors looking to invest in these projects.