Author: TIMOTHYRADIER

Inside Kenya’s ambitous plan to raise Sh9trn from green bonds

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With the framework in place, it is a matter of when, not if, the government will issue a green bond, and experts estimate it may be very soon as no hurdle now stands in the way. Green bonds allow public and private institutions to raise finances to be used specifically for environmental projects that help with climate change mitigation and adaptation.

Through the framework, the government specified the kind of projects that will benefit from the proceeds of a green bond, should it float one, focusing on programmes that will boost Kenya’s environmental sustainability.

“Proceeds of the Kenyan Sovereign Green Bond will be used to finance in whole or in part eligible green assets or projects that are to bc identified from the approved National Budget by Parliament,” states the framework. Some of the projects earmarked to benefit from the financing are sustainable water and wastewater management systems, which are expected to increase supply of water to farmers, households and industry, solving one Of the most widespread challenges associated with climate change today.

Other projects will be in renewable energy, projected to reduce the energy access gap; clean transport, including the much anticipated bus rapid transport (BRT); and green residential and commercial buildings to boost energy efficiency.

Green bond

Experts who worked on the framework say it was built on the International Capital Markets Association’s (ICMA) green taxonomy — a standard on what kind of projects can benefit from funds raised from a green bond. Mr Evans Osano, the Capital Markets Director at Financial Sector Deepening (FSD) Africa, which helped in the development of the framework, explains that

The framework also specifies how the government will select and evaluate projects, how the proceeds will be managed and how the impacts of the investments made from the proceeds will be reported. “Credible, science-based, widely supported guidelines about what assets or projects qualify for green bonds help investors make informed decisions about the green credentials of a bond,” says Vimal Parmar, a senior capital markets specialist at FSD Africa.

This means that unlike traditional bonds, green bonds require a much higher level Of transparency about the use Of the funds raised from them, a factor which has been a double-edged sword for the growth of the green bonds in Africa.

While the idea of green bonds is not new, it has remained an elusive concept for African governments. Since its inception in 2008, only two African countries have so far successfully issued sovereign green bonds.

Nigeria was the first country to float such an instrument in 2019, raising $40 million (Sh6.5 billion), followed by Egypt, which raised $750 million (Sh127 billion) in 2020. Globally, 32 countries have issued green bonds, raising around $355.6 billion (Sh57.2 trillion), of which only 0.2 percent has come to Africa, data from the ICMA shows.

Mr Osano believes that the slow issuance in Africa is because “the requirements are quite onerous; therefore, issuers have to be prepared to meet them”. It is not yet clear how much Kenya will seek to raise from the market in the expected first issuance of a green bond, or whether the bond will be floated locally or on the international market, like a Eurobond. However, the climate finance gap is currently estimated at Shll.16 trillion (S69 billion), which is the amount required to meet Kenya’s Nationally Determined Contributions (N DCS) — the country’s climate change mitigation and adaptation commitments — by 2030.

Osano avers that while green bonds may not raise the entire deficit, they are the most important form of climate finance, as “it has the potential to raise the highest amount for climate finance.” I le estimates that up to 75 per cent Of the gap, about Sh8.7 trillion, could be raised from green bonds by 2030.

Ikechukwu Iheagwarn, East Africa regional director at credit rating agency, contends that green bond investors are indeed more concerned with the environmental impact of the finances they raise, rather that the returns, making green bonds much cheaper than traditional bonds.

“Investors in a green bond won’t look at it like a conventional bond. They look at the expected impact and gives concessional terms, so it will definitely be cheaper than other bonds,” says Mr Iheagwam.

Green bonds market

Today, the global green bonds market is estimated to be worth S 2.2 trillion, more than a tenfold increase from what it was worth about ten years ago, positioning the facility as a leading source of climate finance for African countries. With Kenya now much closer to issuing the financial market product that ever, experts contend that it won’t just be a source Of funds for ‘government
projects, it is expected to bolster economic growth, save lives, livelihoods, and businesses, which are already bearing the brunt of climate change.

“Without the green finance from green bonds, no African country will meet the net-zero emissions goal nor the sustainable development goals. We need the finances to realise those goals,” said Rachel Antwi, head of sustainability at Pan-African lender EcoBank. “Climate change has severe consequences over the short to medium term across multiple sectors, such as agriculture, industry, energy, water, trade and tourism. If we don’t act now, it will impede Kenya’s vision to be a nation that has a clean, secure and sustainable environment by 2030.” Explains ESD Africa’s Parmar.

“Ihe National Treasury estimates that every year, floods alone erode 2 to 2.1 percent of Kenya’s gross domestic product, and droughts cost the country about pollution, general environmental degradation and other challenges which either stem from climate change or increase the country’s vulnerability to climate shocks.

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Letter: Current package of half measures can’t cure Africa’s debt crisis

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Moritz Kraemer’s Markets Insight piece (January 19) rejects the suggestion that the downgrading of African sovereign eurobonds is evidence of an anti-African bias. If anything, Kraemer argues, the credit rating agencies have been rating too generously, evidenced by figures showing the default ratio for B-rated African countries has historically been much higher than the global average.

But the data he presents to support this is patchy. African countries do not have a long history of ratings or even market access and in any case this fails to explain why African countries routinely have to pay more for their debt than Latin American countries with similar or riskier profiles.

Where he is right, however, is that criticising rating agencies will not help to solve the debt crisis affecting more than half the low-income economies in sub-Saharan Africa.

The seriousness of the situation cannot be overstated. These countries are paying an average of 31 per cent of revenues as debt service. This leaves little room for spending on development after recurrent expenditure is accounted for. As a consequence, gains on the poverty front are eroding quickly. The World Bank predicts that across sub-Saharan Africa, per capita gross domestic product, which has not increased since 2015, will drop at an annual average rate of 0.1 per cent over the 10 years to 2025, by when the number of people living in absolute poverty will have reached 472mn, or 37 per cent of the region’s population.

Addressing this situation will need more than the current package of half-measures which are aimed at addressing the liquidity problem for market access countries. Africa’s debt crisis is also a solvency one with developmental ramifications. What is needed is a comprehensive approach: the equivalent of the Heavily Indebted Poor Countries (HIPC) initiative, which the World Bank and IMF launched in 1996 to ensure that no poor country faced an unmanageable debt burden.

But safeguards should be put in place to address the moral hazard of debt forgiveness. There should also be much greater attention on reforming the Common Framework — the G20’s mechanism for dealing with insolvency and protracted liquidity problems — to facilitate orderly and quicker debt restructuring for those market access countries that would need to do so.

Evans Osano
Director, Capital Markets, FSD Africa

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Ethiopia stock exchange launch target slips from mid-year on delayed capital raise

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Ethiopian Securities Exchange CEO Tilahun E. Kassahun details short and long-term goals for the country’s planned stock exchange.

The planned timing for the launch of Ethiopia’s first stock exchange since the 1970s has slipped from the middle of this year to the third or fourth quarter, Tilahun E. Kassahun, CEO of the Ethiopian Securities Exchange, tells The Africa Report.

The exchange is seeking to raise S16m, a quarter of which is being provided by the government. About half of the remainder has been secured from the private sector, and the aim now is to close the capital raise by the end of March. The capital raising was opened in November 2023, and the aim had been to close in early January. The Christmas break contributed to the delay in fundraising, Tilahun says. “Foreign investors were out on holiday.”

Privately held Ethiopian bank Zemen has said it will buy a 5% stake in the exchange. FSD Africa, which is funded by the United Kingdom government, will also have a stake. “We want most of Ethiopia’s commercial banks to invest,” says Tilahun, adding that foreign investors including other stock exchanges are being targeted.

“There’s [a] very strong private-sector appetite.” The capital raising is also open to individual investors, and has a minimum ticket size of $180,000.

The exchange is working on a pipeline of about six unnamed state-owned enterprises, which will be listed. The pace of initial public offerings (IPOs) may be gradual. “You can’t have two IPOs in six months in Ethiopia,” Tilahun says. More investor education is needed before there can be a stream of IPOs. “Our retail investors are not educated yet.”

Repatriating funds

Preparations for the exchange have been ongoing for the last 18 months, and have included visits to stock exchanges in Nigeria, Kenya, Ghana, Morocco, Euronext, Malaysia and all three exchanges in China. Cooperation with the Nigeria Exchange Group (NGX) has been ongoing and the NGX has helped prepare the rulebook which will be used in Ethiopia.

As a latecomer to stock exchanges, Ethiopia can learn from previous successes and failures, Tilahun says. The Nigerian exchange “is one of the strongest in terms of management in

The first year is likely to see a focus on listings by introduction of private companies, rather than IPOs, Tilahun says. About eight private companies may be listed in this way in the first year, and some private banks are now taking steps on hiring advisers with a view to listing, he adds.

The long-term goal of the exchange is to have about 90 companies listed within 10 years, with a balance between state-owned and private businesses. Tilahun is confident that foreign investors can be attracted and that they will be able to move their money out of the country. There won’t be any restrictions on investors repatriating principal and dividends, subject to the availability of foreign exchange, Tilahun says.

The government and the central bank are planning new reforms to improve foreign currency availability, Tilahun says. Problems getting money out of the country “are not the result of prohibition”, he says. “When the environment improves, investors get to repatriate their funds.”

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Dorothy Maseke: Unlocking Africa’s natural capital

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For too long, the economic orthodoxy guiding businesses — as well as the central banks and regulators overseeing them — has taken scant interest in the natural capital that underpins so much economic activity. For decades, many have invested their faith in the power of the markets to inexorably protect value and the assets which guarantee it.

However, change is afoot. What’s more, it’s a seismic shift led by Africa.

Natural systems account for 50% of global economic value generation and few can now doubt that natural assets are inextricably linked to economic health. This emerging consensus, that acknowledges nature’s status as an engine of economic growth, could not come sooner.

The world’s stock of natural assets is declining at a disturbing rate. Just one of many depressing examples is the fate of the world’s coral reef habitats, which constitute the biodiversity engine of our oceans and illustrates the scale of the burgeoning crisis: Oceanpanel.org studies indicate that climate change — and the accompanying acidification of the oceans — will destroy 72% of coral reef habitats by the end of this century. That does not account for the toll of overfishing and pollution, which will cause further damage.

Africa’s leadership in integrating nature-related risk frameworks derives from the knowledge that the continent’s share of damage will be disproportionate. Why? The continent claims a quarter of the world’s natural capital, 65% of the world’s arable land, 25% of the world’s global biodiversity and 20% of global tropical rainforest area. Indeed, while the global decline in Biodiversity Intactness Index score amounted to 2.7% between 1970 and 2014, Africa witnessed a decline of 4.2% in its score.

A roadmap for real change

From an environmental standpoint, these statistics suggest a tragedy of unparalleled scale. But economically speaking, the risk is nothing short of existential.

The African Development Bank estimates that natural capital accounts for between 30% and 50% of the total wealth of African countries; and in sub-Saharan Africa, more than 70% of people depend on forests and woodlands for their livelihoods. From agriculture to fishing and tourism, Africa’s economic future is in real, imminent jeopardy.

Establishing nature as a key area of risk management marks a vital first step, from which can follow a roadmap to real, tangible change.

In December, world leaders convened in Dubai for the COP28 climate change conference, which has elevated nature as one of its central themes — an important move since COP15’s adoption of the Kunming-Montreal Global Biodiversity Framework (GBF). The framework contains vital targets for achievement by 2030, including the conservation of at least 30% of land, sea and inland waters, as well as restoration amounting to 30% of degraded ecosystems, and a $500bn annual reduction in subsidies that promote biodiversity loss.

Pre-empting the sceptics, it’s of course true that target-setting and ambitious rhetoric do not themselves address the challenge we face. But establishing nature as a key area of risk management —

requiring sober, active regulatory intervention — marks a vital first step, from which can follow a roadmap to real, tangible change.

Though indispensable, COP is not the only forum for change. The Taskforce on Nature-related Financial Disclosures (TNFD) marks an important shift in how businesses account for their non-financial liabilities, as well as their impact on the surrounding ecology. Its recommendations (already launched in Kenya and South Africa) have convinced much of the private sector that environmental performance is as material as revenues and market share — a shift inconceivable only a decade ago.

In Africa, both the African Natural Capital Alliance (ANCA)-run pilot, as well as the work of TNFD consultation groups in Kenya and South Africa, are revealing significant private sector interest in early adoption of nature-related disclosures. But what about those who supervise the private sector and set the economic ‘mood’?

We’re seeing a real shift in African voices leading the way for change. Many now recognise the need for African private and public sector awareness and capability-building for the successful integration of not only future nature-related risk frameworks and standards, but also broader nature-related capabilities. Without engagement on these topics, there is a danger of creating additional transition risks and barriers to investment in the African continent.

Asserting the centrality of nature

Arising from the 2017 ‘One Planet’ summit in Paris, the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) has undertaken impressive work orienting the financial system to manage risks and mobilise capital for green investments. With 129 members hailing from every major region of the world, there is a real appetite among regulators for guidance on natural assets and capital. Crucially, African regulators have led the development and implementation of these recommendations, and from Morocco to Nigeria, Kenya to Ghana and South Africa, financial authorities are asserting the centrality of nature in national economies and economic strategies.

Both the TNFD and the NGFS have established frameworks and regulatory best practices to encourage natural capital’s incorporation into economic thinking and strategy. However, many continue to doubt the real, material economic benefits nature affords.

An economic case for natural conservation and restoration could invoke almost limitless examples, but mangrove restoration represents a particularly striking case in point. As well as being almost peerless havens for biodiversity, mangroves turbo-charge local economies and, indirectly, the broader global economy. For example, a staggering 80% of world fishing catches depend in some way on mangrove forests.

Beyond fishing and carbon sequestration, mangroves also matter to world business because they insulate coastal economies from the ravages of erosion, flooding, storms and tsunamis. They are, in essence, nature’s first line of defence.

Again, the coastal defences provided by mangroves benefit more than those inhabiting coastal regions — indeed, they are of vital importance to any business with direct or indirect connections to suppliers, customers, or services in major world economies such as India, Brazil, the Philippines, Ivory Coast, Mexico, China, Vietnam and Bangladesh. The ability of these economies to withstand the growing threat of rising sea levels will prove vital for the world’s supply chains and those companies hoping to reach consumers in much of the Global South — where a growing proportion of the world’s future customers will live and work.

Channelling capital into projects, such as those undertaken by the Global Mangrove Alliance, and ensuring regulation deters coastal depletion and deforestation, ranks as one of many nature-related challenges financial authorities will face over the coming decade. Failure to do so will unleash human and economic damage to global growth on a scale which will easily outstrip the disruption wreaked by the COVID-19 pandemic.

Few businesses are insulated from these risks

It’s worth restating the global implications of this threat — few, if any, businesses on Earth can reassure themselves that they are insulated from these risks. A survey of these threats makes for depressing reading. However, there’s another story to tell — one in which natural capital underwrites sustainable development and becomes a cornerstone of rapid economic growth.

With 75% of African countries having sea access, a sustainable blue economy promises significant long-term wealth if well-managed. The Green Growth Knowledge Platform, for example, found that every US dollar invested in marine protected areas in Senegal and Tanzania generated more than $5000 in economic value. A carefully managed process of extraction and processing could well endow the continent, which hosts 30% of the world’s mineral reserves, with economic firepower previously unthinkable.

Moreover, if financial regulators are able to construct a credible global market for carbon and biodiversity credits, Africa’s vast natural wealth can be, simultaneously preserved and monetised.

It’s a truth most MBAs cover in their first lesson, but one that we seem to have collectively forgotten: strong risk management is impossible without real transparency and honesty.

It’s time, therefore, to think about nature and its preservation not as a fluffy add-on or stamp of corporate virtue, but as a core business consideration — as material as accountancy rules or corporate governance regulations. The shift in attitude must be stark. Just as regulation protects business, investors and the public from practices such as fraud, which ultimately destroy value, so must financial authorities work to protect that which underpins all human activity: nature.

On December 5, ANCA — whose mission is to catalyse nature- positive African economies — hosted a session at COP28’s Blue Zone to discuss the results of a pioneering, first-of-its-kind stress test of nature risks across five African financial systems. We know the threat to Africa’s natural capital is looming, but it’s key that we establish just how exposed economies are, and in what ways. Only then can central banks and regulators intervene to ensure the strength of African financial systems, and the resilience of the environment and ecology which underpins them. Action is needed — and for this to be effective, clarity on where and how is key.

Africa is sitting on a green gold mine — but its institutions must work to protect the inheritance of Africans, both living and as yet unborn.

Dorothy Maseke is Africa lead, nature finance and Taskforce for Nature–related Financial Disclosures at FSD Africa, and head of the African Natural Capital Alliance.

Finance Minister launches SEC’s 5-year strategic plan for market regulation

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The Minister for Finance, Mr Ken Ofori-Atta, has unveiled a comprehensive five-year strategic plan for the Securities and Exchange Commission (), signalling a dynamic approach to market regulation and positioning the Commission as a top-tier securities market regulator in Africa.

Commencing in 2023, the strategic plan outlines five overarching goals and encompasses 60 initiatives designed to fortify the SEC’s role in the financial landscape.

The goals include deepening and expanding markets, enhancing market awareness and education, building the capacity and capability of the SEC, strengthening market infrastructure, and developing a robust legal and regulatory framework.

The official launch took place during the SEC’s Ghana Capital Market Conference, a significant event marking the Commission’s 25th anniversary. The conference focused on the theme “Deepening and Diversifying Ghana’s Capital Market Towards a more Resilient Financial System.”

In his address, Minister Ofori-Atta emphasized the pivotal role of the capital market, contributing approximately 14% to the Gross Domestic Product (GDP) and impacting around 10 million people in the country.

He underscored the government’s commitment to implementing targeted policy initiatives aimed at diversifying the investor base, reducing external dependency, and fostering broader market participation.

The Finance Minister highlighted initiatives, such as the development of a framework for domestic credit rating agencies, aiming to provide impartial assessments of companies and securities. These measures align with the broader objective of ensuring a more positive impact on the economy.

Reverend Ogbarmey Tetteh, the Director-General of SEC, acknowledged the evolving financial landscape and the unique challenges it poses to capital market stakeholders.

He stressed the need for financial markets to evolve, innovate, and develop versatile investment products to navigate the changing environment successfully.

Over the past five years, the SEC has introduced 22 guidelines, enhancing the resilience and robustness of the capital market. Tetteh outlined upcoming guidelines on crowdfunding, green bonds, financial resources, market making, margin trading, securities lending, borrowing, and asset-backed securities, all contributing to market resilience.

The Commission has already initiated the implementation of a Risk-Based Supervision framework, marking a strategic shift from the compliance-based supervision mode of operators.

Established in September 1998, the SEC underwent a name change from the Securities Regulatory Commission to the Securities and Exchange Commission in 2000 (Act 590).

The Securities Industry Act, 2016 (Act 929), further expanded the SEC’s powers, replacing the previous Securities Industry Law, 1993 (PNDCL 333).

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Listing of the Inaugural Sustainable Bond on the BSE

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For Immediate Release, 15th December 2023: Botswana Stock Exchange (BSE) is pleased to inform its valued stakeholders that today, the first-ever Sustainable Bond has been listed on the BSE. The bond, amounting to P47.4 Million, was listed by Absa Bank Botswana Limited (Absa) under its P2.0 Billion Medium Term Note Programme.

The BSE CEO, Mr. Thapelo Tsheole said, “This is historic for the market, and I would like to congratulate Absa and their stakeholders for this magnificent achievement. Largely, it’s as a result of the various strategic undertakings to cultivate and foster a conducive market for Sustainable Bonds. Pursuant to introducing the listing requirements for Sustainable Bonds, extensively building capacity around these instruments and introducing the fee incentives, we have introduced a new Sustainable Bonds Segment where Green, Social, Sustainability and Sustainability-Linked Bonds can be listed to raise funds for sustainable development”.

Mr. Tsheole elaborated that the impact of the fee incentives for listing Sustainable Bonds, which is a 25% discount on initial listing fees and annual sustaining fees relative to conventional bonds, were critical in lifting Botswana’s ranking in the Absa Africa Financial Markets Index (AFMI) 2023 from number 8 in 2022 to number 6 in 2023.

“In the next year, we are looking to roll out ESG Guidelines, Guidelines for Listing Sustainable Bonds, and explore introducing ESG Ratings for issuers. For today’s feat, we could not have achieved this much alone. Let me thank FSD Africa for their technical assistance under the SADC Green Bond Programme, recognize the investors who subscribed to this issuance and once again applaud Absa for taking the lead”, Mr Tsheole added.

For more information, contact the following;

Botswana Stock Exchange
Market Development Department
marketdev@bse.co.bw
Tel: (+267) 367440

FSDAi Nyala Facility Extends $1mn to WIC Capital to Boost Gender Lens Investing

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FSDAi Nyala Facility BV has extended a USD 1 million loan to WIC Capital, a local capital provider investing in Senegal and Côte D’Ivoire that focuses on financing women-owned and managed Small and Growing Businesses (SGBs).

WIC Capital is led by Ms. Evelyne Dioh Simpa, a Fund Manager with a wealth of finance experience and supported by a robust team and board.

WIC Capital has a strong alignment with FSDAi Nyala Facility due to its unwavering commitment to promoting access to finance for female owned SGBs needed to expand their businesses.

For example, in Senegal, a mere 3.5% of women entrepreneurs access credit from financial institutions.

WIC Capital focuses exclusively on investing in businesses owned and/ or led by women, demonstrating that the financing gap for female-owned enterprises in West Africa can be addressed.

Furthermore, WIC Capital stands out for its innovative product structures tailored to local SGBs.

Notably, its origins in an exclusive women’s angel network, adds to its uniqueness within the FSDAi Nyala Facility portfolio, making it an invaluable learning opportunity for all investors in the small and growing businesses investing ecosystem.

Women entrepreneurs in Africa not only encounter challenges when it comes to access to finance but also grapple with the scarcity of platforms offering the essential knowledge and assistance required for the expansion of their businesses.

WIC Capital works with early-stage, women-owned/ led enterprises to provide first-time external capital as well as business training and mentorship.

Also, WIC Capital leverages a large network of successful women entrepreneurs and civic leaders to co-fund and support these emerging businesses.

The business training and mentorship is provided by the WIC Académie through a technical assistance program.

Alongside the women’s angel network, other funders of WIC Capital include foundations, multilateral donor agencies, and development financial institutions.

“Through its investment in WIC, FSDAi is backing an African women-led capital allocator with deep local angel networks, a creative funding structure and financing solution for small and growing businesses in West Africa. With our investment, WIC can position itself to attract bigger pools of capital to expand its strategy in Senegal and Cote d’Ivoire,” noted Anne-Marie Chidzero, Chief Investment Officer at FSD Africa Investments.

“I am proud that the UK is investing US$1 million in WIC Capital through Financial Sector Deepening Africa Investments. I have seen first-hand WIC Capital’s inspiring work and know that they are a deeply impact-focused organisation. They support young female entrepreneurs in a market where access to funding is a huge barrier for their growth. At the heart of building sustainable and inclusive businesses lies the need to advance gender equality through women’s economic empowerment. I look forward to continuing our collaboration to create jobs and empower Senegal’s talented women,” noted Juliette John, UK Ambassador to Senegal. 

“FSDAi is playing a critical role in the development of an emerging asset class of small business growth funds Africa, particularly women-led funds. The funding of WIC Capital represents an important confirmation of WIC’s innovative approach to financing early-stage women businesses in West Africa.  By melding their business development services, women investment club mentoring with investment capital, WIC provides a comprehensive approach to the challenges that to date have constrained Africa’s women-led businesses to growth and thrive.  We believe this commitment will be the foundation upon which other DFIs and local institutional capital holders can also provide funding to WIC Capital and other innovative local capital managers seeking to invest in Africa’s women businesses,” noted Drew von Glahn, Executive Director of the Collaborative for Frontier Finance.

“WIC Capital’s mission aligns with FSDAi’s desire to address the disfunctions of African capital markets, which include the structural barriers that small businesses face in accessing financing, specifically when they are women led. This partnership will be catalytic in the development of a local capital provider that has the potential to profoundly change the local ecosystem, by providing risk capital and business support to women led small and growing businesses (SGBs), with the ultimate goal of increasing women’s agency and economic benefit. With this investment, we are closing our first fund, and we believe this partnership will help accelerate the mobilization of our second fund to serve SMEs generating a strong impact in Senegal and Côte d’Ivoire,” concluded Evelyne Dioh, Managing Director of WIC Capital.

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TDB Group and FSD Africa Collaborate on Project Preparation Facility for Climate Action Projects in Africa

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The Eastern and Southern African Trade and Development Bank Group (TDB Group) and Financial Sector Deepening Africa (FSD Africa), are pleased to announce a new partnership on the sidelines of COP28 to accelerate the implementation of climate action projects across the continent.

In 2022, TDB launched Class C Green + shares, an innovative equity instrument that provides a pathway for institutional investors to contribute to climate action and SDGs with risk capital, leveraging each dollar invested four times into qualifying projects and transactions.

However, the challenge of lack of bankable green projects persists. To address the latter, TDB Group has set-up a project preparation facility for climate action projects which FSD Africa will strengthen through technical assistance support under this agreement. More specifically, FSD Africa will support the Group through expert services to expand its lending pipeline in line with its Climate Finance Strategy and Green Taxonomy, enable aligned projects to reach financial closure, as well as to continue mobilizing new climate-themed capital to deploy.

Expanding the pipeline of green projects is indeed a priority for TDB Group to meet its commitments in supporting its member states to address climate mitigation and adaptation needs, as well as to create additional opportunities for further investments in Class C Green + shares and deploy available climate-themed funding.

Mary Kamari, TDB Group Corporate Affairs and Investor Relations Executive said, “TDB Group has been positioning itself to accelerate the financing of climate action through its Trade and Development Fund (TDF), where a project preparation facility was set-up. We are pleased to enter into this agreement with a likeminded partner like FSD Africa which will extend valuable capacity support towards our vision to advance climate action in the region.”

Mark Napier, the CEO of FSD Africa said, “Multilateral Development Banks are an important part of the financing ecosystem in Africa. Our partnership with TDB Group will increase project pipeline opportunities, and avail innovative financing instruments and structures to attract institutional capital for Africa’s sustainable development priorities. We are pleased that two African institutions are collaborating on solutions for Africa’s climate financing gap.”

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TDB Group and FSD Africa Collaborate on Project Preparation Facility for Climate Action Projects in Africa

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The Eastern and Southern African Trade and Development Bank Group (TDB Group) and Financial Sector Deepening Africa (FSD Africa), are pleased to announce a new partnership on the sidelines of COP28 to accelerate the implementation of climate action projects across the continent.

In 2022, TDB launched Class C Green + shares, an innovative equity instrument that provides a pathway for institutional investors to contribute to climate action and SDGs with risk capital, leveraging each dollar invested four times into qualifying projects and transactions.

However, the challenge of lack of bankable green projects persists. To address the latter, TDB Group has set-up a project preparation facility for climate action projects which FSD Africa will strengthen through technical assistance support under this agreement. More specifically, FSD Africa will support the Group through expert services to expand its lending pipeline in line with its Climate Finance Strategy and Green Taxonomy, enable aligned projects to reach financial closure, as well as to continue mobilizing new climate-themed capital to deploy.

Expanding the pipeline of green projects is indeed a priority for TDB Group to meet its commitments in supporting its member states to address climate mitigation and adaptation needs, as well as to create additional opportunities for further investments in Class C Green + shares and deploy available climate-themed funding.

Mary Kamari, TDB Group Corporate Affairs and Investor Relations Executive said, “TDB Group has been positioning itself to accelerate the financing of climate action through its Trade and Development Fund (TDF), where a project preparation facility was set-up. We are pleased to enter into this agreement with a likeminded partner like FSD Africa which will extend valuable capacity support towards our vision to advance climate action in the region.”

Mark Napier, the CEO of FSD Africa said, “Multilateral Development Banks are an important part of the financing ecosystem in Africa. Our partnership with TDB Group will increase project pipeline opportunities, and avail innovative financing instruments and structures to attract institutional capital for Africa’s sustainable development priorities. We are pleased that two African institutions are collaborating on solutions for Africa’s climate financing gap.”

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