Category: News

Catalytic Capital in Action: FSDAi’s Role in Shaping Kenya’s Affordable Green Housing Market

Posted on by Kihingu Inc

Unlocking finance for affordable, sustainable homes

In 2021, FSD Africa Investments (FSDAi) joined a consortium of leading investors including UK Climate Investments (UKCI, now under British International Investment management), the European Investment Bank (EIB), and the County Pension Fund (CPF) to launch the International Housing Solutions (IHS) Kenya Affordable Green Housing Fund. The Fund was established to tackle Kenya’s pressing urban housing deficit by financing developments certified through the EDGE green building standard, targeting low- and middle-income households.

By providing catalytic equity capital, FSDAi aims to demonstrate the commercial viability of green affordable housing. The Fund aims to deliver up to 4,000 green-certified homes by 2030, improving living standards, reducing utility costs, and contributing to Kenya’s climate resilience and inclusive urban growth.

Turning investment into market insight

Beyond financial returns, FSDAi’s investment sought to create lasting market impact. Through a side letter agreement, FSDAi required IHS to adopt an Open Source Policy, ensuring that data and insights generated from the investment would be publicly shared. To embed this principle, FSDAi provided the Centre for Affordable Housing Finance in Africa (CAHF) with a grant for a four-year Open Access Initiative (OAI) to collect, analyse, and disseminate data from IHS and other housing developments in Kenya.

This initiative is now generating vital, publicly available market intelligence and helping new investors understand the economics of affordable housing, guiding policymakers, and strengthening the capacity of housing practitioners across the region. By doing so, FSDAi’s catalytic investment continues to multiply its impact far beyond a single project, driving systemic change in Africa’s housing finance ecosystem. Various outputs have been published on CAHF’s Open Access website, benchmarking construction costs in Kenya, reviewing reasons for rejection, promoting ESG standards, and now, as the housing developments that IHS is funding start to unfold, tracking the steps, time and costs involved in the delivery of affordable housing in Kenya.  With the support of FSD Kenya, CAHF has also secured the agreement of the Kenyan State Department for Housing and Urban Development to track six Affordable Housing Programme (AHP) projects, documenting and comparing their costs, while also considering the impact of the AHP on the economy and on job creation.  A further initiative has been the Nairobi Metropolitan Area Dashboard which collects and maps all housing developments in the Nairobi Metropolitan Area, giving an indication of market activity and targeting.  CAHF is currently in discussion with partners in Abuja, Nigeria, to replicate this model there.

It is still early days, but the delivery of these outputs is having two broad impacts – first, the content is being incorporated in strategic decision making by the parties, as developers and investors, as well as the Kenyan government, consider the data.  Second, the sensitivities around data sharing are slowly being overcome, and more developers are expressing an interest in participating in the OAI, both to better understand their own businesses, but also to showcase their track records and experience in the wider sector and to investors in particular.  CAHF hopes that the OAI will continue to be supported by funders so that it can grow into a sustainable offering not only in Kenya but across the continent.

Catalytic capital for systemic change

The IHS Kenya case demonstrates FSDAi’s unique approach as:

  • A catalyst for innovation — testing and scaling new investment structures that blend impact and commercial sustainability.
  • An enabler of market development — providing insights that attract institutional capital and build investor confidence.
  • A partner committed to impact — improving access to affordable housing while advancing climate resilience and social inclusion.

Through strategic, insight-driven investments like this, FSDAi is helping reshape Africa’s housing finance landscape — proving that catalytic capital can unlock lasting, large-scale transformation for people and planet.

 

See a short case study of the IHS Investment and the Open Access Initiative in the recently published Playbook for Blended Finance in Affordable Housing in Africa.

Commentary: Beyond Mobile Money, Mobilising Africa’s $2.4tn in Domestic Capital

Posted on by Kihingu Inc

Patrick Njoroge (“A financial meltdown in Africa will affect everyone”, Opinion, September 4) is correct in highlighting improved financial inclusion and growth in remittances as reasons to be cautiously optimistic about Africa’s long-term future. Business leaders in retail finance must surely be looking forward with great confidence to the economies of scale that will eventually come from serving a tech-savvy population whose median age is 19 and growing almost three times faster than that of the EU.

But he overlooks another reason for optimism — the growth in domestic institutional assets under management, which FSD Africa estimates now stand at well over $2.4tn across Africa, 50 times greater than annual aid flows to the continent. Growth in Kenyan pension assets in 2024 was up 14 per cent in Kenyan shilling terms and 40 per cent higher in dollars, but could have been even faster, according to the regulator, had there been a more supportive policy and regulatory environment.

As Njoroge rightly says, Africa needs stronger domestic financial markets. Rebalancing long-term financing towards local currency would make growth less reliant on international finance, including aid, and more resilient to shocks, not least those resulting from climate change.

As an innovation in African financial markets, mobile money was staggeringly successful. We now need breakthrough innovation in African capital markets to draw private institutional capital away from defaulting to funding government debt so that potentially very large volumes of capital can be put to work funding the projects that will give Africans the jobs and basic services they want.

Mark Napier

Chief Executive Officer, FSD Africa, Nairobi, Kenya

Four African Projects Selected for CAPE’s First Cohort

Posted on by Riitho

FSD Africa, through the Carbon Accelerator Programme for the Environment (CAPE), has announced the first cohort of projects to receive support in advancing community-led ecosystem restoration through nature-based carbon initiatives.

Chosen from over 100 applicants across 28 African nations, the four projects span Kenya, Nigeria, Tanzania and Zambia, and together cover more than one million hectares of land. They include forest regeneration in Nigeria’s Gashaka Gumti National Park, community-led restoration in Tanzania’s Rubeho Mountains, rangeland rehabilitation in Zambia’s Barotseland, and mangrove restoration in southeastern Kenya’s Papariko Mangroves.

Launched in November 2024 by FSD Africa, in partnership with the African Natural Capital Alliance (ANCA) and Finance Earth, CAPE was designed to address the shortage of early-stage funding for nature-based carbon projects in Africa. By offering recoverable grants and tailored transaction advisory support, CAPE helps projects move from concept to investment readiness.

With Africa’s GDP heavily dependent on natural capital, these projects demonstrate how nature can serve as both a climate solution and an economic asset.

As Reshma Shah, Carbon Markets Lead at FSD Africa, noted:

These projects go beyond generating carbon credits—they are blueprints for redefining how the world invests in and values nature.

You can access the full press release here.

FSD Africa and Children’s Investment Fund Foundation (CIFF) launch Sovereign Debt Advisory & DMO Institutional Support Programme

Posted on by Riitho

FSD Africa Launches New Programme to Integrate Sustainable Finance into Africa’s Debt Strategies

FSD Africa, in partnership with the UN Economic Commission for Africa (UNECA) and supported by the Children’s Investment Fund Foundation (CIFF), has launched a new technical assistance and institutional support programme for Debt Management Offices (DMOs) across Africa.

The initiative will help governments embed sustainability into their sovereign debt strategies, unlocking fiscal space for development and climate action, while mobilising both domestic and international investment.

Announced shortly after the Africa Climate Summit in Ethiopia, the programme reflects FSD Africa’s commitment to advancing Africa-led solutions, resilient local-currency finance, and sustainable growth. It also builds on FSD Africa’s 2025–2030 strategy, which aims to catalyse £10 billion of private capital—most of it in local currency—for climate-positive economic transformation.

The facility will provide DMOs and Ministries of Finance with funded, practical support in areas such as sustainability-integrated debt strategy, preparation of new financing instruments, investor engagement, institutional strengthening, and market development.

Mark Napier, CEO of FSD Africa, commented:

Sustainable finance is not a label change—it’s a fiscal strategy. By integrating sustainability into sovereign debt management, countries can lower refinancing risk, extend maturities, and unlock capital for productive, climate-positive national priorities.

You can access the full press release here.

Nature-based carbon projects in Ethiopia invited to apply for support from The Carbon Accelerator Programme for the Environment (CAPE)

Posted on by Allan Musumba
CALL FOR APPLICATIONS

Addis Ababa, Ethiopia, 9 September 2025: The Carbon Accelerator Programme for the Environment (CAPE), in partnership with FCDO Ethiopia, is pleased to announce that it is seeking applications from impactful nature-based carbon and biodiversity projects in Ethiopia for its next cohort.

Local nature-based carbon project developers are invited to submit an Expression of Interest (EOI) via this link: https://forms.gle/Yq9eQ4Pc2HyCfNLB8 no later than 17:00 EAT on Friday 26th September.

CAPE is an initiative being delivered by FSD Africa in partnership with Finance Earth and the African Natural Capital Alliance (ANCA) to mobilise investment into projects across Africa to cut carbon emissions and protect biodiversity while also benefitting local communities.

Who is eligible for this cohort?

  • Location: Projects located in Ethiopia
  • Project Type: Nature-based carbon projects with strong biodiversity and local community impact potential
  • Development stage: We encourage projects at any stage of their development journey to apply

CAPE provides project development support and transaction advisory services to accelerate high-integrity, nature-based projects towards investment.

The first cohort of CAPE is already underway, with support being provided to four projects in Kenya, Tanzania, Zambia and Nigeria.

CAPE is particularly interested in projects that:

  • Have a clear pathway to financial viability
  • Are considering biodiversity and social impact beyond carbon standard requirement (e.g., Verra CCB)
  • Intend to use a robust standard for validation and verification
  • Can be scaled and/or replicated

By applying, you wlll be considered for tailored support from the CAPE team to strengthen your project’s technical, financial, and impact foundations, and prepare it for investment.

FSD Africa at ACS 2

Posted on by Allan Musumba

It is two years since African leaders gathered in Nairobi for the first African Climate Summit. The resulting pledges, amounting to $26bn, were strong evidence of a real commitment to Africa-led climate solutions. But even more important was the summit’s assertion of African self-determination and specifically the need to mobilise Africa’s domestic private capital in the continent’s climate efforts.

As leaders gather again for the second Africa Climate Summit (ACS2) in Addis Ababa, the world looks very different. There is huge global uncertainty, and the economic headwinds are even stronger. Never has the vision set out at that first summit, and in the subsequent Nairobi Declaration, of a green path to economic growth that delivers both prosperity and environmental benefits, been more relevant and more important.

This is why we wholeheartedly support the aims of ACS2 and hope to see emerging from it an even greater consensus around the value of investing in climate. The summit is also a chance to set out even more compellingly the argument that investing in climate and economic growth are not mutually exclusive but rather complementary and to make the case for greater private sector, particularly domestic, investment in the continent.

The recent cuts to overseas aid have only added to the urgency for the continent to become more economically independent and resilient. That will require stronger domestic financial markets and more long-term financing in local currency to make growth less reliant on international finance, including aid, and more resilient to economic shocks, not least those resulting from climate change.

Indeed, our belief that a green path to growth will deliver a stronger and more resilient economy and that mobilising domestic private capital will be key to this, are central to FSD Africa’s mission to make finance work for Africa’s future. This approach is embodied in our new strategy which is based around three key imperatives: increasing economic opportunity, protecting the environment and increasing resilience to climate and economic shocks. We have an ambitious target to mobilise and catalyse £10bn of private capital for sustainable development, 84% of it in local currency.

But the strategy also reflects the immediate problems facing many countries in Africa with a focus on sustainable debt, more adaptation finance, job creation and the need for more climate finance to power the energy transition – all areas we will be discussing across the more than half a dozen events we are hosting or co-hosting at ACS2.

Above all this summit is an opportunity to show how Africa can be at the forefront of finding solutions to the twin threats of climate change and nature loss by highlighting proven Africa-led climate solutions and the continent’s bold efforts to re-green its landscapes. In that spirit, we and our partners will also be highlighting examples of the extraordinary financial innovation that is taking place across different parts of the financial system and presenting some of the transactions that have resulted.

Please join us at ACS II in Addis Ababa from 08th to 10th September to discuss these issues

TECA Heat Action Wave Launches in Nigeria

Posted on by Riitho

The new TECA Heat Action Wave (THAW) will back 12 early-stage ventures in Nigeria with capital and venture-building support to protect heat-vulnerable communities.

Nairobi, Kenya, August 2025 — TECA Heat Action Wave (THAW), a new initiative to address Nigeria’s escalating extreme heat crisis, was launched today by BFA Global, FSD Africa, ClimateWorks Foundation, and the UK’s Foreign, Commonwealth & Development Office (FCDO) Nigeria. Together, the coalition has committed $1.1 million to support 12 early-stage ventures developing innovative solutions to protect climate-vulnerable communities from the growing impacts of extreme and chronic heat.

Extreme heat events are now at least ten times more likely in West Africa due to human-caused global warming. In Nigeria, millions of jobs and livelihoods are already at risk, with more than 60% of the population regularly exposed to dangerous heatwaves. Urban settlements like Lagos, Kano, and Abuja now experience heat indices above 50°C during peak months.

This is what Juliet Munro, Early-Stage Finance Director at FSD Africa commented:

“Extreme heat represents perhaps the most overlooked consequence of climate change affecting Africa today,….It’s not only a public health emergency, but a threat to livelihoods, productivity, and long-term economic resilience. Through this initiative, we’re making a strategic investment in African-led innovation, supporting scalable, context-specific solutions that deliver real impact where it’s needed most.”

THAW will support 12 early-stage ventures developing market-driven early warning tools, innovative financial instruments such as parametric heat insurance, emergency-centric finance tech, and ecosystem enablers and builders — tools and services that help individuals and small businesses operate more safely and efficiently in rising heat, preferably integrating early warning systems or fintech solutions.

You can access the full press release here.

FSD Africa London Climate Action Week in review

Posted on by Kihingu Inc

We are just back from the London Climate Action Week (LCAW) which happened against a backdrop of increasing geopolitical and economic uncertainty as well as growing evidence of the developmental and financial challenges facing Africa as a result of climate change and biodiversity loss.

Africa’s financing needs are particularly stark. Africa needs about $190bn per annum for climate and yet is only attracting $44 billion. Adaptation financing is a particular concern – in Africa, finance for adaptation is less than a third of the total and is not increasing to any material extent, despite global attention being paid to the need to invest in adaptation, especially in Africa. With public funds in short supply as a result of cuts to international aid programmes and domestic government finances constrained by the cost of servicing high levels of debt, the role of private capital will be crucially important.

At the same time, African institutional investors control over $2.4 trillion in assets (expected to grow to at least $6.4 trillion by 2040). This capital is conservatively invested, with little allocation to alternatives, infrastructure and climate-aligned investments. Mobilising this private capital, which is mainly in local currency, could make a major contribution to filling Africa’s development financing gap.

Across more than five events at LCAW which FSD Africa will be hosting or participating in, our team will be discussing these issues and highlighting both the financing challenges facing Africa and the huge opportunities a locally financed, green economic pathway to growth offers. They will make the case that if we are to mobilise the capital Africa requires, we need a more resilient and innovative financial system. But we will only be able to achieve this through collaboration between international development finance, investors and the African private financial sector.

Speaking ahead of LCAW, Mark Napier, CEO of FSD Africa said: “We are in a moment of major change. On the one hand, the turbulence in the aid (and development finance) world is a threat. On the other, we are seeing the emergence of a consensus that developing countries need to strengthen their own economic resilience and self-reliance – and domestic financial market development is going to be an important part of this.”

We are glad that our sessions enhanced understanding of both the challenges and the solutions to Africa’s development finance and hear inspiring examples of the huge progress already being made – in capital markets infrastructure, new financial solutions, in nature finance and carbon markets – and in measures to redirect available finance towards climate adaptation and resilience.

If you are keen to continue conversations on these critical topics of our time, please contact our Ag. Strategic Communications Director Kaara Wainaina kaara@fsdafrica.org

Sessions we curated/participated in at the London Climate Action Week 2025 can be viewed here.

FSD Africa Investments announces first investment in Nature-Based Solutions with US$2.5m commitment to West Africa Blue

Posted on by Allan Musumba

Nairobi, July 2, 2025: FSD Africa Investments (FSDAi), the UK-backed specialist development finance investor, is investing US$2.5 million into West Africa Blue (“Blue”)’s blue carbon project in Sierra Leone’s Sherbro River Estuary (SRE). The investment was announced by the UK Foreign Secretary, the Rt Hon. David Lammy MP, at the Africa Debate in London on Wednesday 2 July 2025. FSDAi’s investment will contribute to the conservation and restoration of approximately 94,000 hectares of mangrove ecosystems across 11 chiefdoms. Working in close collaboration with local communities, the project will demonstrate the potential for blue carbon nature-based solutions to sustainably address climate change, protect biodiversity and build income diversification and economic development opportunities.

Mangrove ecosystems are powerful carbon sinks that combat climate change and build coastal resilience. Despite their promise, blue carbon projects struggle to raise private sector investment due to their complexity, extended timelines to scale and high execution risks. FSDAi’s early-stage investment will help de-risk the SRE project and demonstrate the feasibility of structuring financing facilities linked to carbon revenue, enabling project developers to transition from a dependence on scarce philanthropic and concessional funding towards a model that attracts commercial investment. This aligns with FSDAi’s broader mission to mobilise capital and promote development impact in underserved communities. The project is FSDAi’s first direct investment in a nature- based solution and will complement its existing portfolio that enables capital allocation to Africa’s green economic growth by backing existing asset managers and venture builders.

In addition to significantly reducing greenhouse gas emissions and protecting biodiversity, the project is expected to significantly empower the economic livelihoods of local communities. A core component of the project is the development of an innovative, equitable and transparent benefit sharing mechanism in consultation with communities and the government.

Announcing the investment, FSDAi’s Chief Investment Officer, Anne-Marie Chidzero said,

“This strategic US$2.5 million investment in West Africa Blue’s pioneering blue carbon project in Sierra Leone marks a significant step for FSDAi. As our first direct foray into nature-based solutions, it underscores our commitment to demonstrate the financial proposition to financing nature and creating economic opportunities for communities.”

Elizabeth Littlefield, Blue’s Senior Partner, said, “West Africa Blue is grateful for the support and partnership of FSDAi in this groundbreaking project which will be transformative for communities and the coastal ecosystem that is their home. With FSDAi’s support, we aim to set a high benchmark for quality, transparency and fairness including sharing our Benefit Sharing Agreement and other tools, in order to catalyze the nature-based solution market in Africa.”

About West Africa Blue
West Africa Blue (“Blue”) is a community-centric developer of high integrity, large-scale, blue carbon projects in West and Central Africa. Blue partners with local communities and governments to develop financially sustainable projects that seek to mitigate climate change, boost community resilience, and protect biodiversity. Based in Freetown, Sierra Leone, Blue has worked in the region for over a decade. Its flagship mangrove conservation and restoration project is in the Sherbro River Estuary of Sierra Leone, with a second project in Guinea and a pipeline of other, early-stage projects. Blue offers its projects as ‘Living Labs,’ sharing its lessons learned, tools, models and even its full Benefit Sharing Agreement, open source, to help develop the market for high integrity nature-based projects in Africa and beyond.
For more information, visit https://www.westafricablue.org/.

FSD Africa invests in Holocene, a Climate Tech Start-up Venture Capital Provider

Posted on by Kihingu Inc

FSD Africa’s Early-Stage Finance Pillar is investing US$150,000 in Holocene Ventures Fund (HVF), a climate tech start-up venture capital provider that seeks to raise an initial US$2 million to invest in 12 high impact climate businesses. HVF I will provide the track record and pipeline to raise a $30M pre-seed to series A climate tech fund in 2025.  The investment by FSD Africa comes alongside investments from other angel investors across Europe, USA and Africa.

Mary Kashangaki, Assistant Manager, Digital Innovations, FSD Africa said:

We need to think differently about how we finance Africa’s green transition. FSD Africa’s investment in Holocene offers an exciting opportunity to work with experts to build a new kind of venture capital fund that is flexible enough to meet the unique financing needs of early-stage climate ventures.

Holocene, based out of South Africa, has created an investment platform for climate conscious individual and institutional investors seeking climate positivity and venture capital returns. Holocene Venture Fund (HVF) will provide innovative pre-seed financing, combining both cash and venture building services, to climate tech start-ups, recognizing the need for diverse financial solutions to scale climate businesses. 

Josh Romisher, CEO, Holocene commented:

“Africa is incredibly important in the global climate conversation. Holocene is very eager to partner with innovative investors such as FSD to prove African climate tech can deliver measurable climate impact and VC returns.”

To date, Holocene has made 6 investments from its permanent capital vehicle as well as another 4 investments from HVF I. It aims to make 5 investments per year infusing them with a catalytic blend of financial & human capital with a focus on commercial outcomes. With concerted effort by diverse players to accelerate green growth in Africa, specialist climate focused investment funds like Holocene are expected to enhance capital flows and innovation in new climate technology led solutions across Africa.