Dr. Danso’s Investor Letter on Allocating to African Green Industrial Infrastructure as a Globally Competitive Investable Asset Class

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  • Dr. Danso’s Investor Letter on Allocating to African Green Industrial Infrastructure as a Globally Competitive Investable Asset Class

Dear Esteemed Institutional Investment Partners,

We stand at a historic crossroads where financial prosperity converges with environmental responsibility.

As universal owners, our capital, portfolio companies, and market influence wield the power to redefine global industrial markets while fostering sustainable returns for future generations.

With the advent of the African Union’s Nairobi Declaration (Africa’s Green Investment Deal), the asset-owner-led African Green Infrastructure Investment Bank (AfGIIB), the successful launch of the African Continental Free Trade Area (AfCFTA), and the Africa Green Industrialization Initiative (AGII) launched at COP28, I implore you to seize this pivotal moment and dedicate strategic investment allocations to African green industrial infrastructure.

This emerging globally competitive investable asset class is poised to reshape the global manufacturing landscape while generating exceptional market-appropriate risk and climate-adjusted returns.

The Opportunity:

  • $10 Trillion Annual Market:

African green industrial infrastructure assets and the $3 trillion platform of NDC project investment opportunities are poised to capture a significant share of the $10 trillion per annum and growing global green offtake market.

With escalating demand for industrial green technologies and electric vehicle batteries, Africa emerges as a central player in sustainably meeting this demand, leveraging its abundant renewable energy resources.

  • Superior Renewable Energy Endowments:

Africa’s vast renewable energy resources serve as the cornerstone for decarbonizing mining and manufacturing processes, driving advancements in artificial intelligence, and sustainable food systems (Africa possesses 60% of the world’s arable land).

Harnessing these resources propels Africa to the forefront of green technology production, offering unparalleled environmental benefits while revolutionizing traditional manufacturing paradigms.

The Value Proposition:

  • Cost-Efficient Global Green Manufacturing Hub:

Your investment allocations, combined with the expertise and engagement of investors’ green tech portfolio companies will consolidate African green industrial infrastructure investability, establishing Africa as the world’s most cost-efficient and competitive green manufacturing hub. 

By beneficiating the continent’s 40% global stock of crucial green mineral reserves, Africa addresses the well-documented long-term global shortage of green technologies.

Incentive-rich, dedicated special-purpose green industrial city destinations provide portfolio companies access to predictable growth markets and technology transfer opportunities.

  • Competitive Returns:

From both a return on investment and risk-adjusted return perspective, African green industrial infrastructure presents an enticing proposition.

Abundant resources, favorable regulatory environments, and strategic partnerships guarantee competitive returns with carefully managed risk exposure.

  • Mitigated Political & Forex Risks:

Aligned co-investments with African asset owners and strategic at-scale long-duration, bankable offtakes, and blended investment alliances with initiatives such as the Inflation Reduction Act, African Growth and Opportunity Act (AGOA), the EU Green Deal’s Value Addition Partnerships, and bankable long-duration global corporate commitments for green technologies, mitigate historical barriers to global market access, foreign exchange, and political risks associated with investing in African markets.

Transparent global governance structures and regulatory reforms, exemplified by the world-class Institutional Investor-Public Partnership (IIPP) framework, fortify investor confidence and safeguard investments.

In Conclusion:

Investing in African green industrial infrastructure transcends mere investment as usual; it embodies a strategic imperative for domestic and global universal owners dedicated to advancing global sustainability.

By harnessing Africa’s Nairobi Declaration, Green Industrialization Initiative (AGII), Continental Free Trade Area (AfCFTA), $3 trillion pipeline of NDC investment opportunities, untapped natural and human capital potential, and investor ownership of global value chains, by working with the African Green Infrastructure Bank (AfGIIB), asset owners can catalyze mandate-aligned, sustainable economic growth, propel technological innovation, and combat climate change on a global scale, all while optimizing market-appropriate returns on a climate and risk-adjusted basis.

I invite you, as global investment leaders and partners, to join the AfGIIB and African asset owners in embarking on this transformative journey.

Together, we can shape the future of global green industrialization, finance, and long-term investment, delivering exceptional impact for stakeholders, people, planet, and nature.

Sincerely,

Dr. Hubert Danso
CEO and Chairman, Africa investor (Ai) Group
Chair, African Sovereign Wealth and Pension Fund Leaders Forum
Chair, African Union Continental Business Network
Co-Chair, Sustainable Markets Initiative (SMI) Africa Council
Chair, CFA New York Global Asset Owners Council

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