UNECA Launch Liquidity and Sustainability Facility to Catalyze Green Development in Africa

Afghanistan’s mineral wealth could become the foundation of long-term national prosperity, but only if institutional design turns geological assets into credible economic systems.

National Opportunity
A major untapped endowment of copper, iron ore, lithium, rare earths, and gold.

Structural Challenge
Weak institutional architecture has prevented mineral wealth from becoming durable prosperity.

Financing Pathway
Transparent licensing, sovereign revenue stewardship, and infrastructure-led development.

Afghanistan’s mineral endowment could become the basis of a new national development model, but only if licensing, sovereign revenue stewardship, and infrastructure are designed to turn buried assets into durable prosperity.

The future of Afghanistan may depend less on the minerals beneath its soil than on the quality of the institutions, structures, and ambitions built above it.

Preeti Sinha

In 2021, the United Nations Economic Commission for Africa (UNECA) unveiled a groundbreaking initiative to address the dual challenges of liquidity constraints and sustainable development in Africa. The new Facility, aptly named the Liquidity and Sustainability Facility (LSF), is poised to revolutionize access to cheaper financing for African nations while promoting green development. The LSF was designed with the support of the United Nations Economic Commission for Africa and Afreximbank with the dual objective of supporting the liquidity of African Sovereigns Eurobonds and incentivizing SDG-related investments such as SDG and green bonds on the African continent.

The Liquidity and Sustainability Facility: A New Financial Instrument for a New Era

The Liquidity and Sustainability Facility is designed to lower borrowing costs for African governments and green projects by providing liquidity support and sustainability-linked incentives. In a region where the cost of capital is often prohibitively high, this initiative represents a critical intervention to foster economic growth and environmental stewardship.

The LSF will be supported by Citi, acting as structuring agent and providing expertise in setting up this facility, together with law firms White & Case LLP and Matheson and consultancy firm Eighteen East Capital.

Key Financial Details:

  • Facility Size: The LSF aims to be initially capitalized at $1 billion, with a target to grow to $30 billion in the coming years. This sizable capitalization is expected to make a significant impact on the liquidity of African debt markets.
  • Interest Rate Reduction: The facility is structured to lower the interest rates on sovereign bonds by providing liquidity at a discounted rate. The LSF will buy bonds at a lower yield, effectively reducing the borrowing costs for participating countries.
  • Green Development Focus: The LSF has a strong emphasis on green projects. A significant portion of the facility\’s resources will be allocated to projects that align with the Sustainable Development Goals (SDGs), particularly those aimed at mitigating climate change and fostering renewable energy.

The Liquidity and Sustainability Facility: Mechanism of Operation

The LSF will operate through a market-based mechanism where it purchases African sovereign bonds and green bonds, providing immediate liquidity to the issuing countries. By purchasing bonds at lower yields, the facility reduces the effective interest rate for African governments, making it cheaper for them to borrow. This mechanism is particularly beneficial for countries that struggle to access international capital markets at reasonable rates.

Bond Purchases and Market Impact:

  • Sovereign Bonds: The facility will initially target bonds from African nations with a focus on those that demonstrate a commitment to sustainability and fiscal responsibility. The LSF\’s purchases are expected to stabilize and even lower yields in African bond markets.
  • Green Bonds: The LSF will also invest heavily in green bonds, providing much-needed capital for projects that promote environmental sustainability.

The Liquidity and Sustainability Facility: Sustainability and Liquidity – A Balanced Approach

The LSF\’s innovative approach balances the need for immediate liquidity with long-term sustainability. By tying liquidity support to sustainability outcomes, the Facility incentivizes African nations to adopt greener policies and invest in sustainable infrastructure. This approach not only addresses short-term financial needs but also aligns with the broader global agenda of combating climate change.

Sustainability-Linked Incentives:

  • Interest Rate Rebates: Countries that meet or exceed specific sustainability targets will be eligible for interest rate rebates, further lowering their borrowing costs.
  • Technical Assistance: The LSF will also provide technical assistance to help countries design and implement green projects, ensuring that the funds are used effectively and efficiently.

The Liquidity and Sustainability Facility: Global Partnerships and Future Prospects

The LSF is backed by a coalition of global partners, including multilateral development banks, international financial institutions, and private sector investors. This broad support underscores the Facility\’s credibility and the global commitment to Africa\’s sustainable development.

Global Partner Contributions:

  • Multilateral Development Banks: Institutions like the African Development Bank and the World Bank have pledged to support the LSF, both financially and through technical expertise.
  • Private Sector Involvement: The Facility is also expected to attract private sector investment, particularly from impact investors who are interested in funding sustainable development in Africa.

Conclusion

The launch of the Liquidity and Sustainability Facility marks a significant milestone in Africa\’s development journey. By providing cheaper loans and promoting green development, the LSF has the potential to transform the continent\’s economic landscape, making it more resilient, sustainable, and inclusive. As the Facility grows and evolves, it will undoubtedly play a crucial role in shaping Africa\’s future.

Afghanistan’s Mineral Future: From Buried Wealth to National Architecture

For much of the modern era, Afghanistan has been interpreted through the language of conflict, fragility, and geopolitics. Yet beneath that familiar narrative lies a different national reality: one of the most underdeveloped mineral endowments in the world.

Its mountains and terrain are believed to hold significant deposits of copper, iron ore, lithium, rare earth elements, gold, and other strategic minerals. At a time when electrification, battery storage, and industrial supply-chain security are becoming central to the global economy, these resources are no longer peripheral. They sit close to the heart of the next industrial era.

But Afghanistan’s mineral story is not fundamentally about geology.

It is about whether a nation can build the institutional, financial, and infrastructural architecture required to transform buried wealth into enduring prosperity.

Natural resources on their own do not create development. In many countries, they have produced volatility, elite capture, fiscal distortion, and missed national potential. Where resource wealth has been translated into long-term strength, success has rarely come from extraction alone. It has come from design.

Three foundations matter.

The first is a transparent and credible licensing regime. Without it, capital remains short-term, speculative, or politically distorted. With it, a country can begin to attract serious long-horizon partners while protecting national interest and public legitimacy.

The second is sovereign revenue architecture. Resource wealth must be governed through institutions capable of channeling proceeds into infrastructure, education, productive systems, and long-term national reserves rather than immediate fiscal depletion. A country that extracts without stewarding simply liquidates its future.

The third is physical economic infrastructure. Mineral deposits become economically meaningful only when they are connected to power, transport, logistics, processing capacity, and regional trade routes. Without these systems, resource wealth remains stranded beneath the ground, technically valuable but nationally unrealized.

Afghanistan’s challenge has not been the absence of assets. It has been the absence of the systems required to convert those assets into broad-based development.

Yet this is precisely why the opportunity remains so large.

Because the sector is still underdeveloped, Afghanistan is not locked into a mature but failing model. It still has the possibility of first-principles design. A serious mineral strategy could serve as the anchor of a wider national blueprint, linking extraction to infrastructure investment, domestic industrial formation, and regional transport corridors connecting Central and South Asia.

This is where the question becomes larger than mining.

The deeper issue is whether Afghanistan can create a credible economic architecture above the mineral base: institutions that inspire trust, capital structures that support long-term development, and national systems that ensure resource wealth strengthens the country rather than fragments it.

Afghanistan’s mineral endowment should not be understood merely as a buried stock of commodities. It should be understood as a strategic national platform, one that could help finance infrastructure, expand industrial capacity, deepen regional integration, and reshape the economic horizon of the country.

The future of Afghanistan may depend less on the minerals beneath its soil than on the quality of the institutions, structures, and ambitions built above it.

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