Category: Announcement

Infoset and SIX are the winners of the DRC – Innovation & Financial Services Challenge

Posted on by 5iveafrica

DRC, 27th January 2022: In partnership with the Central Bank of Congo, we are pleased to announce the winners of the DRC – Innovation & Financial Services Challenge, a competition designed to promote value-creating financial innovation in DR Congo.

Infoset’s “FlexPay POS” was declared the winner in the “Financial Innovation for Economic and Social Development” category, while SIX’s “UFIS” (Unified Financial Identifier System) won in the “Financial Innovation for Solidarity” category, which recognises financial solutions that address the needs of displaced populations, refugees, and host communities in the country.

The winning companies were selected from nearly 100 entries and six finalists, three in each of the two categories. The six finalists each received a grant of US$13,000 for the development of their solution from FSD Africa, a specialist development agency supported by UK aid that works to strengthen financial systems in sub-Saharan Africa. The finalists also had access to support from the Central Bank of Congo to address regulatory issues, in addition to technical assistance from 19 contributors, business associations, consultancies, lawyers and experts.

Innovation is essential to ensure democratic access to financial services. That is why we congratulate the winners and wish them every success. We were particularly honoured to be part of this unique initiative and would like to thank all the candidates for their participation, all the contributors whose time, resources and expertise enabled the finalists to work in the best possible conditions, as well as all the members of the juries for their availability and their indispensable contribution.
Henri Plessers, DRC Country Representative

FSD Africa Announces New Chair of the Board and Three New Non-Executive Directors

Posted on by TIMOTHYRADIER

Nairobi, 17th January, 2022: FSD Africa has announced major changes to its Board with the appointment of a new Chair and three new non-executive directors who will help drive the organisation’s vision of strengthening and deepening Africa’s financial sector particularly in the area of green finance.

Frannie Léautier, a highly experienced finance and development expert with a PhD in civil engineering, joins the Board as Chair having previously held senior leadership roles at the the World Bank, the African Development Bank and Trade and Development Bank Group. She replaces Vincent Rague who has stepped down after seven years in the role.

Frannie brings global experience in both public and private finance and a passion for the transformative role financial markets can play in tackling poverty and inequality with a particular focus on gender lens investing and green finance. After working in development finance for many years, Frannie has also set up two companies and in her current role as Senior Partner and CEO at Southbridge Investments, an investment firm providing financial and advisory solutions for private and public sector clients across Africa, she has worked successfully to attract innovative financing to Africa.

Also joining the eight-strong board in January are three new non-executive directors:

  • David Kanja, the former Assistant Secretary-General for the Office of Internal Oversight Services at the United Nations and a former chair of UNICEF’s independent Audit Advisory Committee
  • Greta Bull, Director of Women’s Economic Empowerment at the Bill & Melinda Gates Foundation and the former CEO of CGAP, an independent think tank focusing on financial services for the poor
  • Kanini Mutooni, Managing Director of the Draper Richards Kaplan Foundation, a US foundation that invests in entrepreneurs providing private sector solutions to global problems, and a former chair of the Global Innovation Fund, a $250M investment vehicle supported by the UK, US, Canadian, Australian and Swedish Governments.

The appointments come as FSD Africa, which is funded by the UK’s Foreign Commonwealth & Development Office (FCDO), is moving into a new phase of growth which will see its role as both a provider and an enabler of green finance in Africa grow strongly in prominence, anchored on a strategy that emphasises the development of capital markets, risk markets and the digital economy.

On behalf of our whole team, I am delighted to welcome these new members to our Board. They all bring extraordinary breadth of experience in development and finance at the highest levels with a global perspective and deep understanding of the African context. I am confident that they will bring huge value to FSD Africa. We have ambitious plans for the future and we are humbled to have the support of a Board with such excellent skills as we head into the next phase of our mission to reduce poverty and inequality by tackling the most intractable financial market challenges in Africa.”

Mark Napier, CEO, FSD Africa

I am honoured to be joining FSD Africa at a pivotal point in its and Africa’s development. The organisation has an excellent track record in deepening financial markets in Africa, piloting innovations in areas such as financial inclusion and capital markets. The finance sector has a vital role to play in helping Africa deal with the consequences of both the pandemic and climate change as well as provide funding for sustainable development. This is an exciting moment for FSD Africa to build on its successes and contribute further in a genuinely transformational way.”

New FSD Africa Board Chair, Frannie Léautier.

We are extremely pleased to welcome Frannie, Greta, Kanini and David to FSD Africa’s Board. Each brings a wealth of experience across financial markets and international development. Their leadership and insights will be invaluable for the organisation as it continues to innovate and deliver on an important and challenging agenda. In the face of the combined challenges of the global pandemic and climate change, our shared ambition to work with partner countries to reduce poverty across the continent by fostering sustainable and inclusive markets is as relevant as at any time in FSD Africa’s journey to date”

Rachel Turner, Director, International Finance at the Foreign, Commonwealth & Development Office.

Underwriting facility set to energise geothermal development in Kenya and Ethiopia

Posted on by 5iveafrica

We are pleased to announce that we, together with Parhelion, a UK-based specialist energy and climate risk finance advisory company, are planning to launch a first-of-its-kind underwriting facility, backed by East African insurers, to de-risk early-stage development of geothermal energy projects with the capacity to significantly expand electricity access and energy sector resilience in Kenya and Ethiopia.

The need

The energy sectors in Kenya and Ethiopia face several systemic issues:

• Large numbers of people continue to live without electricity — 12.5 million in Kenya and 42 million in Ethiopia are still unconnected.

• Growth in energy demand is outstripping supply — Kenya’s power demand is growing 20% faster than GDP, while recent annual growth rates of around 10% in Ethiopia imply a similar increase in energy demand.

• Current sources of energy are either carbon-emitting or climate-vulnerable — 35% of Kenyan power comes from thermal sources, while another 35% comes from hydroelectric dams exposed to drought risks. These risks are heightened in Ethiopia, where 89% of power is hydro-generated.

The solution

Geothermal power plants can produce large amounts of power no matter the time or weather, providing a reliable source of clean energy that is resilient to changes in climate.

Kenya and Ethiopia have large geothermal potential; however, growth in the sector is held back by high upfront investment coupled with the risk of drilling wells that are found to be commercially unviable.

Parhelion will work with East African insurers to create an underwriting facility that mitigates the low probability, high-cost risk of unviable wells. This will use insurance capital to de-risk the early-stage development of geothermal projects, making it easier for projects to attract private investment. Parhelion is also planning to launch the GeoFutures Fund, which would invest in nascent geothermal projects.

The opportunity

East Africa has a potential geothermal capacity of 15,000 MWe; however, just 500 MW is operational in Kenya while Ethiopia has installed just 7 MW. With support from the programme,Parhelion and FSD Africa forecast a 20% increase in geothermal output for Kenya and a 500% rise in Ethiopia, preventing more than 515,000 tonnes of CO2 per year. This is expected to create 2,600 jobs in renewable energy and insurance sectors while bringing electricity to 5.25 million people who currently live without power.

By building the capacity of local regulators and insurers to engage in underwriting facilities, the programme will enable these organisations to apply to same principles to other renewable energy projects. This will deepen the capabilities of the East African insurance market to channel private capital into sustainable development. Moreover, it will enable premiums from underwriting clean energy projects to be retained in the region, rather than the current system, under which local insurers simply act as intermediaries for international counterparts.

FSD Africa joins the Extreme Heat Resilience Alliance: Reducing Extreme Heat Risk for Vulnerable People

Posted on by 5iveafrica

We are proud to announce that FSD Africa is now a member of the  Extreme Heat Resilience Alliance (EHRA), joining over 30 global EHRA partners.  

The EHRA was formed in August 2020 by the Atlantic Council’s Adrienne Arsht-Rockefeller Foundation Resilience Center in response to the growing threat from climate-related extreme heat events, particularly in cities. 

With Arsht-Rock’s support, EHRA has assembled a diverse group of experts to increase collective and individual resilience to extreme heat through education, policy, finance, and implementation solutions for one billion people around the globe, aiming to reduce the negative health and economic impact of extreme urban heat on vulnerable people. Africa is particularly vulnerable to extreme heat. It is the hottest continent on earth, holding many heat-related records. The continent has the hottest extended region year-round, the areas with the hottest summer climate, the highest sunshine duration, and more. According to the UN IPCC, mean annual temperature rise over Africa, relative to the late 20th century mean annual temperature, is likely to exceed 2°C by the end of the century, with a likelihood of land temperatures rising faster than the global average with severe consequences for water availability agricultural systems, and health outcomes.  

“FSD Africa is joining the EHRA in recognition of the impact of extreme heat on Africa’s population and its threat to the realisation of a sustainable future.  Our commitment is to contribute to the urgent collective action required to address the short and long-term shocks of extreme heat, with a focus on vulnerable African communities.”
Kelvin Massingham – Director, Risk and Resilience

In the last five years, FSD Africa has implemented several climate-related projects, including the Green Bond Projects, mobilising over £130m for climate mitigation projects. In addition, FSD Africa is currently exploring flood and heat resilience projects in African cities affected by extreme heat weather conditions, and climate-related effects.   

The work of the EHRA is focused on five areas:  

  • Educating decision-makers linked to vulnerable communities about the risks and impacts of extreme heat by making data and risk assessment tools more widely available;  
  • Recommending and working to enact policies that help governments increase heat resilience in their communities;  
  • Providing better access to affordable financing solutions for heat reduction or protection, including extreme heat risk transfer products; 
  • Quantifying the economic impacts of extreme heat to raise awareness and motivate action; 
  • Implementing replicable, effective on-the-ground interventions for extreme heat reduction. 

FSD Africa signs on to United Nations – Principles for Sustainable Insuran

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We are proud to announce that we have recently signed on to United Nations Principles for Sustainable Insurance (PSI). UNEP’s Principles for Sustainable Insurance (PSI) serve as a global framework for the insurance industry to address environmental, social and governance (ESG) issues—such as climate change, biodiversity loss and ecosystem degradation, pollution, and social inequality—as risk managers, insurers, and investors. 

Founded in 1992, UNEP’s Finance Initiative (UNEP FI) is a partnership between UNEP and the global financial sector to mobilise private sector finance for sustainable development. FSD Africa joins more than 360 members—banks, insurers, and investors—and over 100 supporting institutions—to help create a financial sector that serves people and the planet while delivering positive impacts.  

We have unique experience and understanding of African financial markets. Therefore, this membership will enable us to link and apply the global Principles for Sustainable Insurance to the African insurance industry. We will use our intellectual, operational, and capital capabilities to implement the four Principles across our spheres of influence to contribute to building resilient, inclusive, and sustainable communities and economies on a healthy planet.

As experts in managing long-term complex risks, the insurance industry has an important leadership role to play in helping the financial industry and society more generally sustainably navigate complex ESG risks. The UNEP PSI provides the principles and tools to enable the insurance industry to do just this. FSD Africa is thus committed to supporting the implementation of these principles in the African insurance industry as part of our commitment to creating a sustainable and resilient future.
Mark Napier – CEO, FSD Africa 

 

The Kenya sovereign green bond second-party opinion

Posted on by 5iveafrica

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 under the country’s long-term development blueprint, Vision 2030.

Under the Social Pillar (environmental management) of this plan, the country plans to achieve the vision by intensifying conservation of strategic natural resources, applying measures to guard against the adverse effects of increased pollution and waste, insulating development from natural hazards; and building institutional capacity in environmental planning and governance. The issuance of the Kenya Sovereign Green Bond is one of the mechanisms that have been conceptualised as a plan to secure alternative green and sustainable funding sources to finance this vision, and also fund the budget deficit as part of the Post Covid-19- Green and Resilient Recovery plan to build back Better.

The Kenya Sovereign Green Bond framework articulates the country’s governance on the funds raised from the issuance of the bond, including use of proceeds, the process for project selection and evaluation, management of proceeds, and reporting progress and impact requirements. The framework has been developed in a consultative process, receiving input from government agencies and other stakeholders.

Proceeds of the Kenyan Sovereign Green Bond will be used to finance in whole or in part eligible green assets/projects that will be identified from the approved National Budget by parliament.

Transparency and disclosure on what is being financed by green bonds are important for investors. Credible, science-based, widely supported guidelines about what assets/projects qualify for green bonds helps investors make informed decisions about the green credentials of a bond. Evaluating the green features of underlying assets/projects may be referred to as verification or external review.

The phrase ‘external review’ refers to the independent assessment of the green credentials of a bond provided to the issuer by an external auditor (reviewer). Most external reviews can provide both a Second-Party Opinion (SPO) as well as a Verification (Assurance) Report against the Climate Bonds Standard.

External reviewers are generally engaged while or soon after the issuer has set up a Green Bond Framework and the review is normally made public before the roadshow. This is because the issuer can then use the independent review to promote the green credentials of the bond during the roadshow and it is now common practice for the review to accompany the bond’s information memorandum or prospectus when it is sent to potential investors.

Coding, tracking, monitoring and reporting of the utilisation of all climate finance and sovereign Green Bond proceeds during the fund allocation process until the completion of allocation of proceeds will be ongoing to ensure there is compliance with the Kenya Sovereign Green Bond Framework and any environmental and social risk assessments.

The National Treasury and Planning has obtained an independent second opinion from an appropriate provider to verify that the eligibility criteria, project selection, sovereign green bond proceeds allocation and management process, selected eligible green assets/projects are in line with international best practices on Green Bonds.

To guarantee that funds are properly attributed to the sovereign green bonds assets/projects as outlined in the framework, within the amounts set, the SPO will be published on the National Treasury and Planning website as well as all other websites globally. As per the green bond reporting guidelines, The National Treasury and Planning Ministry is expected to engage, annually, an independent third party to provide assurance on its annual use of proceeds and any impacts realised.

FSD Africa signs on to United Nations-supported Principles for Responsible Investment

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We are proud to announce that our investment arm, FSDAi, has recently been listed as a signatory to the United Nations-supported Principles for Responsible Investment (PRI). Through this new membership, FSDAi joins more than 3,000 other organisations around the world that have publicly demonstrated their commitment to responsible investment.

The membership into this unique and leading platform will enable FSDAi to deeply embed environmental, social and governance (ESG) standards into its investment process while providing opportunities for leadership in thematic areas such as biodiversity and climate change

As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries; we believe that environmental, social, and corporate governance issues can affect the performance of investment portfolios. We also recognise that applying these Principles may better align investors and our investees with the broader objectives of the society. As we grow our portfolio, the adoption of these principles will aid in the escalation of ESG issues during portfolio monitoring but also in taking up ESG opportunities.

We are delighted to join PRI and to the opportunity that this offers to advance further capital investment for sustainable finance, in meeting SDG targets and greening the planet.
Anne-Marie Chidzero, CIO, FSDAi.

PRI is recognised as the leading global network for investors who are committed to integrating ESG considerations into their investment practices and ownership policies, guided by the six Principles of Responsible Investment.

 

The Arab Financial Inclusion Innovation Prize returns for its third edition

Posted on by 5iveafrica

Take financial inclusion to the next level

The Arab Financial Inclusion Innovation Prize (AFIIP) is back to scout and support the most innovative solutions that can make financial services more accessible and affordable for the low-income and MSMEs in the Arab world.

AFIIP is offering prizes of up to $60,000 USD in cash and technical support to ideas, products and services that can improve financial inclusion in the region.

Since 2018, the Arab Financial Inclusion Innovation Prize has identified over 200 innovators in the region. AFIIP has supported solutions span the financial services sector, from start-ups to incumbent institutions, operating in microfinance, digital payments, financial literacy, digital identity, and beyond. AFIIP provides winners with multi-year technical support and gives them access to a global network of thought leaders and investors to help take their ideas to the next level. Applications are judged on their impact, feasibility and marketability by a panel of world-class experts.

This year, AFIIP is also providing additional resources to innovations that can generate green outcomes. There is a second stream to the prize looking for financial solutions that can help mitigate the risks of climate change, increase environmental resilience for the low-income and MSMEs, provide sustainable opportunities to the underserved and enhance the green finance ecosystem of the Arab world.

The call for applications is now open, with the support of SANAD Technical Assistance Facility, FSD Africa and UK aid from the UK government and Spectrum Digital Holdings.

Visit www.afiip.org to learn more and apply.

Together, we can put financial inclusion at the heart of innovation in the Arab world.

Winning AFIIP gave us the opportunity to prove our vision. Two years on, their team continues to engage us in a wide-reaching and fruitful network.
Valify Solutions, 2019 winner

 

11 startups showcase solutions to address COVID-19 challenges in Egypt at DFS Lab demo day

Posted on by 5iveafrica

The demo day was hosted by the Central Bank of Egypt in collaboration with the Financial Regulatory Authority, supported by FSD Africa, through UK aid from the UK government.

Key Facts

–11 FinTech companies were selected from a competitive pool of applicants to build solutions for participating Egyptian banks and financial institutions to address COVID-19 related challenges

-The FinTechs were paired with a bank or financial institution for an innovation sprint to rapidly develop products and services to address specific challenges brought on by COVID-19

-Participating banks and financial institutions have an opportunity to move forward with potential solutions as a result of the demo day

Eleven FinTech companies showcased innovative solutions at a virtual demo day that addressed challenges for Egyptian banks and financial institutions due to the pandemic. The eleven companies spent three days working closely with participating banks and financial institutions in a virtual innovation sprint which culminated in the demo day, facilitated by DFS Lab, a digital commerce investor and accelerator. Under the host of the Central bank of Egypt and in collaboration with the Financial Regulatory Authority, banks and financial institutions participated in the innovation sprint and demo day to identify potential products and services they could bring to market. The innovation sprint and demo day were supported by FSD Africa, through UK aid from the UK government.

COVID-19 has made the need for alternative financing and credit solutions more urgent, and more vital. It is fantastic to see the success of this UK-supported virtual innovation sprint, and the creative solutions developed. From digital payment systems to flexible finance, these solutions will help businesses to bounce back stronger.
James Cleverly, UK Minister of State for the Middle East and North Africa

Stephen Deng, Partner at DFS Lab said:

“Our aim with the COVID-19 Innovation Sprint in Egypt and the resulting demo day was to positively impact end users by connecting banks and financial institutions with companies who can move quickly to solve COVID-19-related challenges and bring these products and services to market. Some of the challenges companies worked to solve include making it easier for people in rural areas to sign up for bank accounts or other financial services, or easing the process of data access for regulators so they can make timely decisions.”

Mark Napier; CEO of FSD Africa said”This year fintech has been able to show its value in the financial sector’s fight against COVID-19. FSD Africa is proud to support the COVID-19 Innovation Sprint and the eleven FinTech organisations that were selected from across the world to build solutions in collaboration with key actors in Egypt’s financial market. These solutions will have a direct and positive impact on people’s lives – from providing digital solutions to the need for cashless payments to creating new ways for businesses to access credit in order to survive the pandemic. We wish them wel”

The participating FinTech companies are:

  •  Flutterwave: a global digital payment platform with expertise in providing access to payment schemes across Africa, Europe and North America via a single integration process for acceptance and disbursements of digital payments.
  •  CreditFins: building MENA’s first Credit Card management app that helps customers analyze their spending, get access to educational content and settle their debt faster and cheaper.
  •  TurnKey Lender: provides a loan management solution to automate the application processing, credit scoring, decision making and underwriting processes to manage different types of lending.
  •  Finllect: a financial wellness app for Gen Z to build credit, prequalify for financial services and automate their finances, enabling underserved, low-income, and unbanked consumers to build a free credit score in minutes.
  •  Valify: building foundations and guiding legislation towards the implementation of electronic KYC as a standard practice for remote customer on-boarding.
  •  Dor-e: a customer experience platform that allows customers to book and track their place in line remotely while giving banks and businesses a real-time view of branch performance
  •  Digify: provides Digital Identity Verification Solutions, end to end e-KYC management systems.
  •  Elucidate: an independent RegTech for financial crime risk assessment.
  •  Enterprise Tiger: a digital omni-channel suite of software products for banking and 
financial services institutions including an omni-channel digital contact to customer 
software and an omni-channel digital end to end delinquency management software.
  •  Dayra: a fintech company empowering businesses to offer financial services such as 
pre-paid cards, micro-loans and micro-insurance to their unbanked gig workers and 
customers.
  •  NEC Payments: a licensed and regulated payment services provider and card 
processor that provides vertically-integrated Banking-as-a-Service and offers digital banking, transaction processing, financial control and compliance technology solutions under licensed and SaaS distribution models.

Participating banks and financial institutions have an opportunity to move forward with potential solutions developed by the eleven FinTech companies as a result of the demo da

Partnership with Moroccan Capital Market Authority to support climate and gender initiatives in North Africa

Posted on by 5iveafrica

We have supported the Moroccan Capital Market Authority (AMMC) to publish best practice guidelines on gender bonds. The work is the initial phase of a wider cooperation agreement between the two institutions to support projects advancing gender equality and climate change. Through the support and technical expertise of FSD Africa, the AMMC built on its previously published guidelines for green, social and sustainability bonds to develop specific guidelines on gender bonds – a first for the North African region.

The wider FSD Africa-AMMC partnership will see FSD Africa support the AMMC to roll out initiatives that facilitate the issuing of gender and green bonds. Gender bonds are bonds that support women’s empowerment and gender equality by financing activities supporting these causes, while green bonds finance projects addressing climate change and sustainability.

Women’s empowerment and climate change are priority pillars for Africa’s sustainable development, which are both in need of additional fundingnvestment. Mobilizing greater global financial flows through green bonds and channelling these towards green investments in Africa is critical.

This year marks an especially pivotal year for FSD Africa’s green finance work in the lead up to the flagship COP26 Climate Change Conference in the UK this November. Here, the world’s decision-makers will convene to discuss climate change globally and in Africa, presenting an opportunity for Africa to play a more important role in addressing global climate change and to secure much needed green finance flows to achieve this.

To support the AMMC’s capacity to issue green bonds in Morocco, the FSD Africa partnership will provide Moroccan regulators and green bonds stakeholders with training on the ins and outs of green bonds and also advise a pipeline of green finance transactions in consultation with financial sector stakeholders.

Morocco is a pioneering financial market in North Africa that has already issued five green bonds. Building capacity to issue more green bonds can therefore play a crucial role in demonstrating the viability for green bonds in North Africa and the wider continent. This initial phase of work is expected to catalyse the issuance of more gender and green bonds in North Africa.

Africa’s support under the partnership will be jointly funded and delivered by the FSD Africa Capital Markets and Strategy Teams.