Author: TIMOTHYRADIER

Democratising Access to Voluntary Carbon Markets: The CAVEX Story

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The Carbon Value Exchange (Cavex) is an innovative initiative that has recently secured seed funding from FSD Africa Investments (FSDAi) and E3, investors committed to driving change in the climate and broader sustainability sector. This investment is a follow-up to grants received from FSD Africa and the Shell Foundation, supported by the UK government (FCDO). This blog aims to shed light to why Cavex exists and the challenges it seeks to address.

The Context

Multinational intergovernmental agreements, most notably the Kyoto Protocol and Paris Agreement, established through the Conference of Parties (COP) process, have recognised Voluntary Carbon Markets (VCMs) as one of the key contributors to curb global warming. Unlike compliance markets, which are government-regulated, VCMs seek to mobilise funding from organisations and individuals who are eager to offset their carbon emissions. Although not mandated or fully defined by regulatory frameworks, projects in VCMs that reduce or remove GreenHouse Gas (GHG) emissions are generally guided by principles originally defined by the Clean Development Mechanism (CDM)[1].

Due to their voluntary nature, VCMs largely operate without regulation, depending heavily on the trust of those seeking to offset their carbon footprints. To foster trust, various organisations have developed “standards” that assure buyers on the legitimacy of the carbon reductions or removals represented by their purchased carbon credits. However, these standards come with their costs and involve processes that must be met by participating projects:

  • Certification fees,
  • Third-party audit costs (Validation and Verification Bodies)
  • Broker commissions
  • Internal monitoring, reporting and verification (MRV) expenses

Furthermore, VCMs face challenges relating to the accuracy and transparency (and therefore trustworthiness) of carbon offset projects and carbon credit pricing. The absence of unified regulation or standards in VCMs leads to fragmented MRV methods, potential inaccuracies, and the risk of mis-selling. For instance:

  • Manual MRV processes might be prone to human error, and often covering only a subset of devices and/or project areas.
  • While intermediaries facilitate access to carbon financing, they can also contribute to pricing opacity between buyers and sellers.

Recently, international organisations and stakeholders, from governments to private sector players, have recognised the imperative to refine carbon markets if they are to significantly contribute to addressing the impending climate change challenges. Initiatives like the development of Core Carbon Principles seek to drive more integrity and fairness into the sector.

Enter Cavex

Cavex is designed to both mitigate these challenges and enhance the integrity of VCMs by:

  • Lowering costs for micro-small projects to generate and sell carbon credits internationally, thus opening doors to the long tail of small-medium sized projects.
  • Utilising digital-MRV tools for real-time monitoring through connected devices or satellite imagery, to accurately assess their carbon emission impacts.
  • Streamlining micropayment processes for carbon credits sales, ensuring capital flows to the most relevant project participants efficiently.
  • Offering a transparent marketplace for carbon credit transactions.
  • Ensuring a greater portion of credit sales revenue reaches the projects on the ground.

Leveraging Digital Monitoring, Reporting and Verification Tools (D-MRV)

Cavex will employ D-MRV tools, like remote monitoring technologies for device-based projects (e.g., solar water pumps, electric cookstoves) and satellite imagery for nature-based projects (e.g., reforestation), ensuring transparency and integrity:

  • For device-based initiatives, digital monitoring hardware/software will collect accurate activity data, such as power usage to calculate CO2e offsets.
  • For nature-based projects, combining on-the-ground data with satellite imagery will monitor project land areas, aiding the validation process of forest growth or loss and above-ground biomass.

Data collected will undergo Data Quality Assurance (DQA) on the Cavex platform, utilising algorithms and random checks to detect anomalies that could misrepresent carbon reductions.

This digital approach reduces the need for costly and time-consuming field audits, allowing for direct platform-based verification. The system itself is audited thoroughly by an independent organisation, that will ensure that the correct (industry established) carbon calculation algorithms are applied to the data, and that the entire reporting processes and ledger systems used are accurate.

For example, in Kenya, a farmer named James reports usage data from his solar water pump directly to the Cavex platform (in either kwh and usage time consumed by the pump controller), translating into digital carbon credit value. These credits, once sold, help James finance his water pump or invest in his farm.

Moreover, Cavex’s digital tools will enable extensive data collection from devices enhancing the accuracy and integrity of the carbon credits generated. This will reduce the need for random selection of devices or plots of land (in nature-based projects) for manual verification, thereby improving the accuracy and integrity of the data underpinning the carbon credits.

A Transparent Digital Marketplace

Validated project data is converted into CO2e units, and eventually into carbon credits, recorded on a digital ledger. Each credit is linked to the project owner, with a traceable journey from creation to retirement. Project owners can list their credits in the marketplace, directly connecting with potential buyers and providing transparent pricing and project information.

Digital Payment Channels Guarantee Direct Benefits to Project Participants

Cavex proposes to integrate digital payment methods like mobile money to distribute proceeds from carbon credit sales directly to project stakeholders. This ensures that projects achieve their goals of GHG reduction or removal by directly benefiting the individuals and communities involved.

For instance, Mary, a small-scale caterer, who purchased an electric cookstove, contributes data that generate carbon credits by displacing traditional carbon-emitting fuels (often charcoal in sub-Saharan Africa). Along with other users, the majority of the proceeds from these credit sales are funnelled back to the cookstove project and its users, reducing costs and enhancing benefits.

Cavex stands at the forefront of democratising Voluntary Carbon Markets, with further trials underway to onboard more use cases, enabling small projects to contribute to climate change mitigation and mobilise finance for resilience.

10 Insurance Start-ups and 4 Corporates Graduate from Bimalab Insurtech Program and Pitch to Potential Investors

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Addis Ababa, March 7th, 2024 – Today marks a significant milestone in Ethiopia’s journey towards fostering innovation and entrepreneurship in the insurance technology landscape. The inaugural BimaLab Ethiopia Demo Day, organized by FSD Ethiopia in collaboration with FSD Africa and the Bill and Melinda Gates Foundation, celebrates graduation of the transformative four-month journey for the cohort of 10 startups and 4 corporates.

Since its inception, the BimaLab Ethiopia program, implemented by FSD Ethiopia with funding from the Bill and Melinda Gates Foundation in cooperation with FSD Africa and the National Bank of Ethiopia, has driven innovation and positive change in the insurance sector.

The program provided participants with invaluable mentorship, training, and resources to develop and refine their innovative Insurtech solutions.

“Hosting the inaugural BimaLab Ethiopia Demo Day and graduation signifies a key milestone in our efforts to foster innovation and entrepreneurship in the insurance technology landscape.” says Abel Taddele, Financial Inclusion, Director. “The cohort’s innovative solutions hold potential to make a tangible impact and contribute to advancement and deepening of the Insurtech ecosystem in Ethiopia.”

Partnering with the Bill and Melinda Gates Foundation has further strengthened the program’s impact, fostering an environment conducive to innovation and entrepreneurship.

“We are proud to partner and celebrate the achievements of the inaugural BimaLab Ethiopia cohort” says Edom Tsegaye, Ethiopia Country Lead, Inclusive Financial Systems, Bill and Melinda Gates Foundation. “Their dedication exemplify the spirit of innovation that is driving positive change in Ethiopia.”

The National Bank of Ethiopia also played a pivotal role in supporting the program, recognizing the importance of fostering innovation in the insurance sector.

“The National Bank of Ethiopia congratulates the BimaLab Ethiopia cohort on their achievements and innovative solutions” says Belay Tullu, Director, Insurance Supervision Directorate, the National Bank of Ethiopia. “As the regulator, we are committed to providing a conducive policy environment that fosters innovation and encourages the development of innovative solutions in the insurance industry.”

FSD Africa’s longstanding commitment to driving innovation across Africa has been instrumental in supporting the BimaLab Ethiopia initiative.

“The BimaLab Ethiopia Demo and Graduation Day represents a significant milestone in our journey to catalyze innovation in the insurance sector,” says Elias Omondi, Principal, Innovation for Resilience, FSD Africa. “We eagerly anticipate witnessing the cohort’s transformative solutions and their potential to drive positive change not only in Ethiopia but also beyond its borders.”

The Graduation and Demo Day features presentations from the cohort members, showcasing their solutions to investors, industry experts, and stakeholders. The event includes panel discussions, keynote addresses, and networking opportunities, providing attendees with valuable insights and fostering collaboration within the Insurtech community.

“We are delighted to have been an implementing partner of the BimaLab Ethiopia program, working alongside FSD Ethiopia, FSD Africa, and the Bill and Melinda Gates Foundation. This initiative has been a catalyst for innovation and entrepreneurship in the insurance technology landscape of Ethiopia,” says Markos Lemma, cofounder and CEO, IceAddis.

One of the highlights of the Graduation and Demo Day is the announcement of the winners, who will receive cash prizes to further develop and scale their solutions. The winners are selected based on their innovation, impact, and potential for growth, with the aim of supporting their journey towards success.

“We are honoured to have been part of the implementation of the BimaLab Ethiopia program,” says Tellistic Technologies representative. “Over the past four months, we have witnessed the remarkable growth and development of the cohort, and we are excited to see their innovative solutions showcased at the Demo Day.”

The BimaLab Ethiopia Graduation and  Demo truly lived to. Its promise of being a  landmark event, bringing together stakeholders and thought leaders to celebrate innovation, entrepreneurship, to accelerate positive change in the Insurtech sector.

For media inquiries or further information, please contact:

Name: Samson Berhane

Title: Communications & Advocacy Specialist

Organization: FSD Africa

Email: samson@fsdafrica.org

Phone: +251937447258

About the National Bank of Ethiopia:

The National Bank of Ethiopia is the central bank of Ethiopia, responsible for formulating monetary policy, supervising financial institutions, including insurance firms, and maintaining price stability. The NBE plays a crucial role in the development and regulation of the financial sector in Ethiopia.

 About FSD Ethiopia:

FSD Ethiopia is a non-profit organization that works to improve financial inclusion, deepen capital markets, and boost access to financial services in Ethiopia. FSD Ethiopia collaborates with various stakeholders to drive innovative solutions and create an enabling environment for inclusive finance in the country.

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Tanga UWASA issues East Africa’s first ever Water Green Bond

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Embargoes until 22nd February 2024, afternoon.

 Tanga

Today, the first ever Sub-national Water Infrastructure Green Bond in East Africa, worth TZS 53.12 billion has been issued by Tanga Urban Water Supply and Sanitation Authority (Tanga UWASA), an autonomous water utility. This landmark transaction would fund the expansion and improvement of sustainable water supply infrastructure and environmental conservation within Tanga city and nearby townships. The 10-yrs project revenue bond to be listed at Dar es Salaam Stock Exchange (DSE), offers an attractive interest rate of 13.5% per annum to be paid semiannually.

The government of Tanzania adopted the Alternative Project Financing (APF) strategy in 2021 because of the need to broaden its domestic revenue base to finance various national development initiatives including water, energy, heath care, agriculture, and other productive infrastructure projects. Tanga bond is the first significant transaction to demonstrate that the existing regulations and frameworks can be used by municipalities, cities, and sub-national entities to raise significant capital from domestic capital markets in local currency to finance development. Innovative financing such as this one can help to bridge the gap between what is available and what the government, need to reach national development plans and sustainable development goals”.

In his speech while gracing the launching ceremony, the guest of honor H.E. Philip Mpango, Vice president of United Republic of Tanzania said that financing of strategic revenue generating projects through a revenue bond such as the Tanga Bond will reduce pressure on government budget and provide an opportunity to focus on priority social initiatives that can’t be financed via commercial windows. On that front, he said , “Am directing the Treasury Registrar’s Office which supervises public institutions and the Minister of State, President Office, Regional Administration and Local Government (PORALG), to explore eligible public institutions, Local Governments, cities and municipalities to prepare to tap long term finance  via revenue and municipal bond issuance.”

Speaking during the event, the Deputy Minister of Finance Hon. Hamad Chande highlighted that, the Government of Tanzania is committed to ensure that its Alternative Project Financing strategy is used by more public entities to finance local development instead of relying only on government grants, a leaf to be borrowed from the Private Sector and Corporates who operates in the same market.

On his side, Hon. Jumaa Aweso, the Minister for Water insisted that the direction of the 6th administration and the CCM Manifesto is to ensure access to water supply by 95% in urban areas and 85% in rural areas by December 2025. To date, water accessibility has reached 88% and 77% in urban and rural areas respectively. “In order to achieve these targets, it is crucial to deploy various innovative financing mechanisms similar to what Tanga UWASA has done. This project is expected to improve and increase water supply from 96% to 100% in Tanga City and reliability of water for 24 hours, by June 2025. Similarly, increase water supply network from 70% to more than 95% in the townships of Muheza and Pangani respectively by June 2025. Likewise, increase capacity to supply adequate water to Mkinga District through the ongoing project which is under construction”. He added.

On his key remarks, the Head of United Nations Capital Development Fund (UNCDF) in Tanzania Mr. Peter Malika congratulated the government for achieving this historic milestone. He said “UNCDF played an important role of partnering with the government and its key national institutions to influence policies and improve the enabling environment related to domestic capital markets development. Tanga Bond is a demonstration that capital markets are a viable option for financing national development needs without increasing the national debt limits”. UNCDF will continue to provide technical assistance and financial assistance to ensure more sub-national and municipal bond issuances take place to meet the growing demand to fund public services driven by growing populations, urbanization and climate change.

Mr. Nicodemus Mkama, Chief Executive of the Tanzania Capital Market and Securities Authority (CMSA) highlighted that “CMSA has been at the fore in steering development of innovative sustainable capital market products that have facilitated successful issuance of the first gender and multi-currency green bonds in Sub-Saharan Africa; as well as shariah compliant sukuk bonds. These results have positioned Tanzania on the map of global capital markets that offer innovative and sustainable products attracting both domestic and international investors. The Tanga UWASA bond, which is an innovative, sustainable blended capital market product with elements of subnational, water infrastructure, green, revenue bond is a milestone pathfinder transaction, expected to showcase other subnational institutions and municipalities in financing revenue generating projects, through capital markets.”

Other stakeholders involved in preparations of the Tanga water green bond includes NBC Bank (lead transaction advisor), FSD Africa (supported green framework), FIMCO and Global Sovereign Advisory (financial & investment advisory), ALN Tanzania (legal advisor), Innovex (reporting accountant), Vertex International Securities (stockbroker) and ISS Corporate Solutions (second-party opinion provider).

General public, investors, Institutions and individuals are welcome to visit any NBC Bank branches or any other authorized brokers to invest in the Tanga water green bond, within the offer period of 6 weeks.

END

UWASA Tanga issues 53bn/- DSE listed water green bond

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The first ever sub-national water infrastructure green bond in East Africa, valued at 53.12bn/- has been issued by Tanga Urban Water Supply and Sanitation Authority (Tanga UWASA), an autonomous water utility.

The transaction is expected to finance expansion and improvement of the water supply infrastructure and environmental conservation within Tanga city and nearby townships.

The 10 year project revenue bond is to be listed at the Dar es Salaam Stock Exchange (DSE), offering an attractive interest rate of 13.5 percent per annum to be paid semi-annually.

Key stakeholders involved in preparing the water green bond includes NBC Bank as the lead transaction advisor, FSD Africa a UK-backed Africa green financing framework, FIMCO (a financial investment management company that offers professional assistance to clients looking to navigate local financial markets) and Global Sovereign Advisory (GSA), a Rockefeller Foundation linked firm advising governments on strategic, economic and financial issues which took the role of financial and investment advisory, ALN (T) a commercial law firm that acted as legal advisor, Innovex (reporting accountant), Vertex International Securities (stockbroker) and ISS Corporate Solutions (second-party opinion provider).

Water minister Jumaa Aweso said at the event that the general public, investors, institutions and individuals are welcome to visit any NBC Bank branch or authorized brokers to invest in the scheme within the offer period of six weeks.

A key stakeholder, FSD Africa in the past two years obtained a £90m commitment from the British government to initiate a new phase of financial sector development.

It said at the time that the £90m commitment from UK Aid, part of a £320m package, would help initiate an ambitious new phase of financial sector development across the African continent.

The UK Aid package includes funding for eight existing local financial sector development programmes and to set up and scale new FSDs in high-priority markets.

There is also the African Guarantee Fund (AGF), a leader in promoting financing of small and medium-sized enterprises (SMEs) across Africa and FSD Africa, a pioneering development agency committed to reshaping Africa’s long-term financial landscape.

The two signed a strategic cooperation agreement aimed at propelling the growth of Green SMEs by providing critical financial support, technical assistance, and capacity building.

The government adopted the Alternative Project Financing (APF) strategy in 2021 owing to the need to broaden its domestic revenue base to finance various development initiatives including water, energy, healthcare, agriculture, and other productive infrastructure projects.

Vice President Dr Philip Mpango praised the financing of strategic revenue generating projects through a revenue bond such as the Tanga Bond, noting that it will reduce pressure on the government budget and provide an opportunity to focus on priority social initiatives that can’t be financed via commercial windows.

He said that it was vital for the Treasury Registrar to oversee public institutions, including those serving regions, municipalities or cities to explore ways to tap long term finance via corporate revenue or municipal bond issuance.

Hamad Chande, the Finance deputy minister, noted that the bond issuance was part of the government’s Alternative Project Financing strategy which needs to be used by more public entities to finance local development projects.

They should not rely on government grants, in the same manner as the private sector and corporate entities operating in the same market.

Mark Napier, the FSD Africa CEO said the successful launch of the Tanga UWASA Water Green Bond is testimony to the power of innovative financing in driving sustainable development in East Africa.

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Landmark $20.8m Sub-national Water Infrastructure Green Bond Issued in EA

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  • This project is expected to improve and increase water supply from 96 per cent to 100 per cent in Tanga City.
  • The government of Tanzania adopted the Alternative Project Financing (APF) strategy in 2021
  • Mark Napier, CEO of FSD Africa, commended the collaborative effort behind the Tanga UWASA Green Bond.

The first ever Sub-national Water Infrastructure Green Bond in East Africa, worth $20.8 million, has been issued by Tanga Urban Water Supply and Sanitation Authority (Tanga UWASA), an autonomous water utility.

This landmark transaction would fund the expansion and improvement of sustainable water supply infrastructure and environmental conservation within Tanga City and nearby townships. The 10-year project revenue bond listed at the Dar es Salaam Stock Exchange (DSE) offers an attractive interest rate of 13.5 per cent per annum to be paid semiannually.

The government of Tanzania adopted the Alternative Project Financing (APF) strategy in 2021 because of the need to broaden its domestic revenue base to finance various national development initiatives, including water, energy, health care, agriculture, and other productive infrastructure projects.

The Tanga bond is the first significant transaction demonstrating that municipalities, cities, and sub-national entities can use the existing regulations and frameworks to raise substantial capital from domestic capital markets in local currency to finance development.

Jumaa Aweso, the Minister for Water, emphasized the government’s mandate to improve water accessibility, particularly in urban and rural areas. He stressed the importance of deploying innovative financing mechanisms, similar to the Tanga UWASA initiative, to achieve ambitious water supply targets by December 2025.

” This project is expected to improve and increase water supply from 96 per cent to 100 per cent in Tanga City and reliability of water for 24 hours, by June 2025. Similarly, increase water supply network from 70Per cent to more than 95Per cent in the townships of Muheza and Pangani respectively by June 2025,” said Aweso.

Government officials, including Philip Mpango, Vice President of the United Republic of Tanzania, emphasized the importance of strategic revenue-generating projects like the Tanga Bond in alleviating pressure on the government budget. They underscored the significance of redirecting resources towards priority social initiatives that cannot be adequately financed through commercial means alone.

“Am directing the Treasury Registrar’s Office which supervises public institutions and the Minister of State, President Office, Regional Administration and Local Government (PORALG), to explore eligible public institutions, Local Governments, cities and municipalities to prepare to tap long term finance via revenue and municipal bond issuance,” said Mpango.

Mark Napier, CEO of FSD Africa, commended the collaborative effort behind the Tanga UWASA Green Bond, emphasizing its role in driving sustainable development across East Africa. Napier highlighted the transformative impact of strategic partnerships in reshaping the region’s financial landscape and fostering inclusive growth.

First Water Infrastructure Green Bond

“We are excited to witness the successful launch of the Tanga UWASA Water Green Bond, a testament to the power of innovative financing in driving sustainable development in East Africa. This milestone achievement not only underscores FSD Africa’s commitment to making finance work for Africa but also highlights the immense potential of collaborative efforts in transforming the region’s financial landscape,” said Napier.

“The Tanga UWASA Green Bond represents a significant step towards inclusive growth, and we are proud to have played a role in facilitating this historic initiative. It reinforces our belief in the transformative impact of strategic partnerships and underscores our unwavering commitment to driving positive change for communities across the continent,” he added.

Deputy Minister of Finance, Hon. Hamad Chande, highlighted that the Government of Tanzania is committed to ensuring that more public entities use its Alternative Project Financing strategy to finance local development instead of relying only on government grants, a leaf to be borrowed from the Private Sector and Corporates who operates in the same market.

Other stakeholders involved in preparations of the Tanga water green bond include NBC Bank (lead transaction advisor), FSD Africa (supported green framework), FIMCO and Global Sovereign Advisory (financial & investment advisory), ALN Tanzania (legal advisor), Innovex (reporting accountant), Vertex International Securities (stockbroker) and ISS Corporate Solutions (second-party opinion provider).

The general public, investors, Institutions, and individuals are welcome to visit any NBC Bank branches or any other authorized brokers to invest in the Tanga water green bond within the offer period of 6 weeks.

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African Guarantee Fund partners FSD Africa to boost Green SME Financing

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The African Guarantee Fund (AGF), a leader in promoting financing of Small and Medium-sized Enterprises (SMEs) across Africa and FSD Africa, a pioneering development agency committed to reshaping Africa’s long-term financial landscape, have today signed a strategic Cooperation Agreement aimed at propelling the growth of Green SMEs by providing critical financial support, technical assistance, and capacity building.

The Cooperation Agreement outlines a detailed framework collaboration between the organizations in boosting sustainable development in Africa. The main aspects of this partnership involve assisting in the development of financial products for institutions, offering partial credit guarantees for bonds and funds raised on behalf of SMEs, and conducting capacity-building events.

Furthermore, by providing financial support and fostering business growth, Green SMEs are expected to play a pivotal role in reducing CO2 emissions. This active contribution aligns with the overarching goal of preserving the environment and facilitates access to finance for business growth and empowering SMEs to generate and sustain employment opportunities, especially for youth and women.

Speaking during the agreement signing, Mark Napier, Chief Executive Officer of FSD Africa said: “This partnership represents an important milestone in our efforts to foster sustainable economic development in Africa. By leveraging the strengths of FSD Africa and the African Guarantee Fund, we will actively create a robust ecosystem that empowers Green SMEs. This collaborative effort aims at facilitating access to affordable long-term funds, thereby accelerating the transition towards a greener and more resilient economy.”

Jules Ngankam, AGF Group Chief Executive Officer said: “Fostering a green economic transformation in Africa is one of our key priorities. Through this partnership, AGF will provide financial institutions with bank fundraising guarantees to enable them access affordable funds aimed at facilitating loans to SMEs investing in low carbon and climate resilient businesses”.

Additionally, AGF will extend partial credit guarantees to lenders in a bid to enhance credit accessibility for Green SMEs, empowering them to flourish and make meaningful contributions to environmental conservation.

The two organisations will also provide technical assistance on green financing initiatives, which is critical in building the capacity of key stakeholders such as Governments, Financial Institutions, and Green SMEs.

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Catalyst Fund invests $1.8 million in nine African climate startups

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Catalyst Fund, a pre-seed VC and accelerator, backs nine African early-stage climate tech startups with a $1.8 million investment to bolster their impact and growth trajectory.

The nine startups benefiting from the investment include Mazao Hub and Medikea from Tanzania, Earthbond, Zebra Cropbank, and Scrapays from Nigeria, Keep It Cool from Kenya, NoorNation from Egypt, Thola from South Africa, and Tolbi from Senegal.

In September 2023, Catalyst Fund achieved its first close, securing $8.6 million out of its $40 million target for investments in African climate startups. Notable investors include FSD Africa, FSDAi, Cisco Foundation, USAID Prosper Africa, and Andrew Bredenkamp.

The Catalyst Fund, established in 2016 and overseen by BFA Global, supports startups in accessing capital, talent, and market opportunities. This marks the fund’s second round of investments in African startups addressing climate change challenges.

In January 2023, Catalyst Fund allocated $2 million to ten startups focused on developing solutions for Africa’s climate-vulnerable communities.

As a result, this latest investment broadens Catalyst Fund’s portfolio to encompass 19 companies operating in eight diverse markets: Kenya, Egypt, Morocco, Nigeria, Senegal, South Africa, Tanzania, and Uganda. The Catalyst Fund team will offer comprehensive venture building support to these startups, effectively integrating them as extensions of their own teams.

These startups are actively addressing climate-related challenges within various sectors, including agriculture, healthcare, energy access, and waste management.

In 2023, a survey revealed that over 110 million Africans faced direct consequences from weather, climate, and water-related hazards in 2022, resulting in economic damages surpassing $8.5 billion.

In discussing the investment, Maelis Carraro, Managing Partner at Catalyst Fund, highlighted that the models utilized by the startups “empower farmers, healthcare providers, waste workers, and small and medium businesses to effectively adapt to the impacts of climate change, thus fostering economic growth with a positive climate impact.

Additionally, Maxime Bayen, Operating Partner at Catalyst Fund, emphasized that “with these latest investments, [Catalyst Fund] is committed to further diversifying its portfolio across various models, climate adaptation sectors, and geographic regions.

In 2022, Catalyst Fund secured a $3.5 million investment from FSD Africa to enhance its footprint and scalability across Africa. With this funding, its objective is to bolster 40 pre-seed impact ventures focused on developing solutions for marginalized climate-vulnerable communities in Africa, while also offering comprehensive venture-building assistance.

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Develop innovative solutions to help address challenges hampering insurance services delivery

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Insurance Technology companies must develop innovative solutions to help address the challenges hampering insurance services delivery to expand insurance penetration and coverage, Acting Commissioner of Insurance, Mr Michael K. Andoh has stated.

According to him, the difficulty in acquiring Police and Doctor’s report to claim insurance, accessing some remote parts of the country, affected insurance services delivery.

Mr Andoh who stated this in an interview after the opening of a one-day forum on the new Insurance Act ad Innovations in the sector in Accra on Tuesday said the aforementioned challenges if addressed would help prompt claim payment and cost of insurance.

It was on the theme “The New Insurance Act:  Unlocking the Insurance Industry Potential via Innovative Technology.”

It was organised by the National Insurance Commission (NIC) in partnership with Financial Sector Deepening Africa and Myfig.

He said the deployment of technology could reduce the cost of accessing insurance and expanding insurance penetration and coverage.

Mr Andoh said the technology could be a lever to reach a lot of the citizens with insurance.

According to him insurance through digital technology could be sold to people where insurance companies could not go.

He said the objective of the forum was to expose the insurance technology companies to the operations and solutions which would be be needed to boost the industry.

Mr Andoh said the NIC had introduced a sandbox to help insurance technology companies to text their ideas.

Under the sandbox, the NIC had offered two temporal license such as Insurers Innovative License for a period of two years to help insurance technology companies to test their insurance technology products.

The Head of Financial Market and Innovation Unit of the Ministry of Finance, Benjamin Torsah-Klu commended NIC for organising the forum, saying the  Ministry of Finance saw the forum as cutting-edge, as it intends to create a platform for the industry to leverage technology and innovation across the insurance ecosystem for the transformation of the market.

“Government would continue to provide the enabling environment for digitalisation and innovation in order to reduce financial vulnerability. Income inequality and the huge risk protection gap,” he stated.

Mr Torsah-Klu said that the Ministry.of Finance saw the forum as a pragmatic step by the NIC to enhance insurance market development, through innovation and technology.

That, he said, would help accelerate growth and deepen insurance access and penetration, and most importantly, improve livelihood and financial stability of the country.

The Principal in charge of Innovation and Resilience of FSD Africa,  Elias Omondi, said the objective of the FSD Africa was to deepen insurance penetration  in in Africa particularly Ghana. “Our role is how to create the large-scale change within the financial market in Africa and Ghana holds a special dispensation in insurance in Africa,” he stated.

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Ethiopian Securities Exchange Attracts Foreign Investors

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Ethiopian Securities Exchange (ESX) is attracting both domestic and foreign investors in line with its capital-raising objectives. Siinqee Bank recently became the second equity acquirer after Zemen Bank, with other investors also showing interest.

ESX, established as a share company by the government and private sector, aims to limit government ownership to twenty-five percent but may increase it if private sector interest is insufficient. Key players such as Ethiopian Shipping and Logistics, Ethio Telecom, and others have committed as initial investors. ESX has actively engaged in roadshows and aims to launch the secondary market by year-end. Foreign investors, including FSD Africa, are also involved. Individual investors are welcome, with minimum investment set at Birr 10 million. ESX forecasts substantial revenue growth, aiming to turn a profit by 2028. Anticipated members include financial institutions, brokers, and investors, with EIH overseeing major public firms, including Ethiopian Airlines Group and Commercial Bank of Ethiopia.

Zemen Bank became the first private entity to secure an agreement with ESX by investing Birr 47.5 million to acquire a 5% ownership share. This fulfills the minimum requirement set by ESX for investors as of January 11, 2024. The move is part of ESX’s goal to raise a total of Birr 625 million, with recent support from state-owned enterprises and FSD Africa. More banks and private investors in Ethiopia are expected to follow suit in the coming months.

Foreign and domestic investors can purchase 75% of the shares of ESX while the rest of the ownership goes to the Ethiopian Government through Ethiopian Investment Holdings.

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Gender Bonds Toolkit Unveiled In Nairobi To Centralize Capital For Women

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NAIROBI, Kenya, Feb 19 – A new gender bonds toolkit has been introduced in Nairobi to centralize capital for women in the African capital markets.

FSD Network’s gender collaborative program, British International Investment (BII), and the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women) are the proponents of the program.

The toolkit seeks to equip stakeholders with the necessary insights and strategies to foster inclusive and impactful investments, bridging gender gaps in the investment landscape.

Generally, gender-focused bond issuances have been viewed as complex due to the lack of a ‘go to’ reference on the process and procedure.

However, the toolkit will champion the centralization of efforts to mobilize gender smart capital, strategically addressing technical capacity gaps on both the demand and supply sides.

“With the launch of the gender bonds toolkit, FSD Africa together with our partners are catalysing a seismic shift in African capital markets,” Mark Napier, Chief Executive Officer of FSD Africa, said during the launch.

“This initiative not only signifies our commitment to gender equality but serves as a powerful tool to mobilize capital, foster sustainable growth, and empower women across the continent,’’ Napier added.

According to a report by UN Women and UNDP in 2022, sustainable bonds aligned with SDG 5, achieving gender equality and empowering all women and girls, were still 1 percent of the $900 billion issued through green, social, sustainability, and sustainability-linked bonds.

The financing gap was even more evident when gender finance was considered as a proportion of total global assets under management (AUM), making up not even 0.01 percent.

However, as of June 2023, global Assets Under Management for Use of Proceeds bonds dedicated to gender equality and women’s empowerment reached $13.5 billion, underscoring the increasing significance of gender-focused investments.

“As a founding member of the 2X Challenge and a leader in providing gender finance, BII is committed to empowering women’s economic development,” Jo Fry, Investment Director, and Head of Intermediated Financial Services at BII, said.

“This means that we’re constantly looking for new ways in which we can mobilise more capital and better support women,” Fry stated.

“Our goal in producing this guide is to demonstrate and create better understanding of how effective gender impact bonds can be as an investment tool to advance gender equality in Africa.”

Parallelle Finance, an investment research and consulting firm, served as the author of the toolkit.

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