AIP International Blended Investment Facility
Linking countries seeking funding to finance sources, and investors to a pipeline of investment opportunities in water and climate resilience.
The AIP International Blended Facility and AU Water Investment Platform respond to the recommendations made by the African Union Commission and International High-Level Panel on Water Investments for Africa.
The recommendation to prioritise continental and country-level platforms that match funding sources to investment opportunities, projects, and programmes seeking finance was made in the Water Investment Action Plan, released in 2023. Read more about the Water Investment Action Plan launch here.
AIP International Blended Investment Facility
The AIP International Blended Investment Facility is closing the water investment gap in Africa by leveraging official developmental assistance and grant finance to de-risk priority water investments using a variety of innovative financial instruments and sources. The Facility complements and leverages existing project preparation facilities for water and climate to mobilise investments for climate-resilient development across the entire value chain of water supply and sanitation.
A feasibility study for the Facility was led by UNDP, UNICEF, Development of Southern Africa, the SADC Water Fund and GWP-Africa. The feasibility study recommended that a ‘match-making platform and blended facility’ be established to leverage already existing funds and project development facilities. The facility forms part of the UN 2023 Action Agenda.
Objectives
Raise funding through innovative strategies and aggregate multiple funding sources that can be rapidly deployed to selected projects.
Offer technical assistance for integrated climate resilient water planning and leverage strategic anchor investments to coordinate sectoral planning and improve the enabling environment for water investments.
Offer repayable-grant funding for project preparation by disbursing repayable grants to governments and developers for preparing complementary projects to anchor investments.
Promote innovative finance and provide viability gap funding for projects that are not commercially viable by leveraging climate finance, ODA and grant finance.
Coordinate and aggregate climate resilient investments for integrated planning and finance allocation by forming a consortium of diverse partners and offering a platform for engagement and coordination.
Act as an intermediary off-taker and service provider to address creditworthiness of water related agencies and utilities by purchasing water from public and private producers and selling that water to utilities and private sector off-takers.
Project Pipeline for the AIP International Blended Investment Facility
Projects were considered for the pipeline if they met at least one of the recommendations, made by the AUC and High-Level Panel, below:
Promote cross-sectoral political leadership at the highest level, with commitment to substantially increase public budgets and investments for water security and sustainable sanitation.
Track progress and enhance mutual accountability for results in the mobilisation of water investments. This includes use of the AIP water investment scorecard.
Promote new sources of funding and innovative finance.
Strengthen institutional regulation for water investments, create incentives and penalties for increased water efficiency.
Advance the use of ODA to de-risk water investments and leverage larger funding streams.
The Project Pipeline and AIP Investment Blended Facility were lauched by the African Union Commission and High-Level Panel on 13 October 2024 during the 9th African Water Week, Cairo.
Continental Knowledge Platform for the Blended Facility
In February 2024, on the margins of the African Union Summit, the Green Climate Fund announced support to 15 African countries to develop climate resilient water programmes including a Continental Knowledge Platform linked to the AIP International Blended Investment Facility. The Continental Knowledge Platform will support AU Member States in developing GCF project pipelines, enabling sustainable capacity building on climate finance programming across the entire value chain of project preparation.
Data and insights from the AIP-PIDA Water Investment Scorecard will inform cross-country and peer-to-peer learning on the Continental Knowledge Platform. The AIP-PIDA Water Investment Scorecard enhances mutual accountability for results in the mobilisation of water investments, supports countries to track progress, identify bottlenecks, and take action to meet the investment needs for the achievement of SDG 6 on water and sanitation. Read more about the Scorecard here.
In September 2024, during a regional workshop funded by GCF and hosted by the DBSA, thirteen SADC countries called for the establishment of an international blended investment facility to unlock innovative finance solutions for long-term water security and climate resilience.