Category: Press release

Tanga UWASA’s Water Green Bond oversubscribed, officially listed on DSE

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Tanga UWASA’s Water Infrastructure Green Bond, the first ever Sub-national bond to be issued in East Africa, has been oversubscribed by 103%. The green bond, worth TZS 53.12 billion, and launched on 22nd February 2024, was successfully listed at the Dar es Salaam Stock Exchange (DSE) on 15th May 2024. It performed impressively with 65% of collection being from local investors while attracting 35% of foreign investors. This is a clear indication of the growing interest in sustainable investment and confidence of international investors to the Tanzania market.

The Tanga UWASA bond will now be traded at the DSE, and funds raised will propel sustainable water supply infrastructure and environmental conservation efforts in Tanga. Listing of the Tanga UWASA bond signifies a successful demonstration that the existing regulations and frameworks can be used by municipalities, cities, and sub-national entities to raise significant capital from domestic markets, in local currency to finance development, and in turn reduce pressure on Government budget.

On his address, the guest of honor, Hon. Dr. Mwigulu L. Nchemba, Minister of Finance, said

“this event and similar events by Corporates in the recent past, is a clear testimony that the Alternative Project Financing Strategy (APF) launched by the Government in May 2021 is doable not only to corporates, but also to Government institutions. And considering that the fully amount required for project implementation is now available, the Ministry of Finance will keep on following up to ensure that this project is successfully implemented as planned.”

Hon. Jumaa Aweso, the Minister for Water highlighted that,

“financing needs for water infrastructure across the nation is still very high. Competing government priorities, and limited budget, results in delay of projects implementation. Bond issuance such as this one, complements government efforts and expedite provision of water services to the citizens. I urge other water utilities to learn from the Tanga UWASA bond and commence replication in their localities”.

On his key remarks, the Head of United Nations Capital Development Fund (UNCDF) in Tanzania Mr. Peter Malika congratulated the government for achieving this historic milestone. He added

“In collaboration with the government, our significance and support as a development finance institution has resulted in clearing and clarifying technical and policy hurdles that existed before this transaction, so that future transactions can use Tanga UWASA’s bond as a national template, fit for replication and taking to scale to other sectors such as energy, agriculture, health, education, income generation and productive sectors. I want to recognize the National Municipal Bond Taskforce, with this team we have built and entrenched a lasting crosscutting national capacities that ought to be emulated as a winning formula in other initiatives”.

From the regulator perspective, Mr. Nicodemus Mkama, Chief Executive of the Tanzania Capital Market and Securities Authority (CMSA) highlighted that,

“Successful issuance and listing of Tanga Water Bond on the Dar Es Salaam Stock Exchange, solidifies the position of Tanzanian capital markets on the map of global capital markets that offer innovative and sustainable financing products attracting both domestic and international investors. He further urged other subnational institutions and municipalities to emulate the path taken by Tanga UWASA, in financing revenue-generating projects through capital markets.”

In addition, “The listing of the TANGA UWASA bond demonstrates the power of collaboration between the public and private sectors, as well as the commitment of stakeholders to make investments that generate financial returns and positive impacts on society and the environment. Therefore, DSE invites public institutions, companies, and the private sector to continue this path of raising capital aimed at promoting and building a competitive economy for the development of people” said Ms. Mary Mniwasa, the Chief Executive Officer of DSE.

On his side, the Managing Director of Tanga UWASA, Eng. Geofrey Hilly, expressed immense pride and honor in witnessing the successful listing of the Tanga Water Bond. He emphasised its significance in advancing sustainable water infrastructure and environmental conservation, extending gratitude to investors, partners, and stakeholders for their unwavering support and trust. He assured the investors,

“as the pilot, we are determined to maintain a strong and unwavering commitment to our investors and the government, on professionalism, proper use of funds, honoring our obligations, and delivering quality water services to our customers”.

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

Landmark moment for African climate investment as sustainability bond secures London listing

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African climate investment received a landmark boost today with the cross-listing of NMB Bank’s (NMB) inaugural sustainability bond, the NMB Jamii Bond, on the London Stock Exchange. It will represent a new, vital and symbolically important route for institutional investors in the world’s largest capital markets to commit funds into African climate finance and development vehicles.

BII was an anchor investor in the Tanzanian shilling tranche of the NMB Jamii Bond and last year invested $1.3 billion in total into African businesses. The DFI is committed to ensuring that at least 30 per cent of its total commitments are in climate finance.

Christopher Chijiutomi, Managing Director and Head of Africa at BII, said: “The NMB listing represents a unique opportunity for UK and global investors to directly participate in Africa’s future. It will enhance vital inward investment into Africa and act as a proof point that sustainable development vehicles of this type can be attractive to the world’s largest institutional investors in London and elsewhere.”

Deputy Foreign Secretary and Minister for Development and Africa Andrew Mitchell commented: “The UK is proud to have supported NMB’s Jamii Bond in Tanzania – through British International Investment’s anchor investment and FSD Africa’s technical assistance support. It is the first sustainability bond to be offered in East Africa, highlighting the UK’s ongoing commitment to financing progress towards the UN’s Sustainable Development Goals and driving a green and sustainable future for the region.”

 Ms. Ruth Zaipuna, Chief Executive of NMB, said: “Today’s listing of the Jamii Bond cements NMB Bank’s position as a trailblazer in sustainability within the African capital markets and we are humbled that our commitment to ESG principles has garnered national and international recognition.

“This extraordinary success highlights the strong confidence Tanzanian and global investors have in NMB Bank’s soundness and commitment to sustainability across operations, business, community, and environment. It reaffirms our creditworthiness and reflects the desire of investors, both local and international, to seize the safe and impactful investment opportunities within Tanzania’s robust investment climate.”

Julia Hoggett, CEO of LSE plc added: “We are delighted to welcome NMB Bank’s sustainability bond to the London Stock Exchange, and to be the venue of choice for the bond’s first admission to trading outside Africa. This not only highlights NMB’s dedication to transparency and commitment to their sustainability objectives, but also showcases the continued international investor support that issuers across Africa can find in London. We are a leading global hub for sustainable finance and proud to be at the forefront of enabling capital flows towards the green economy.”

The need for inward investment into Africa has never been greater. According to ECPDM, the global think tank, the current finance gap per year is between $200-400 billion. The funds raised through the bond will be injected into high-impact companies that are combating the climate emergency and which support inclusive growth.

FSD Africa provided technical assistance for NMB Bank’s Portfolio Review assessed by the Climate Bonds Initiative (CBI) for alignment with ICMA and Multilateral Development Bank (MDB) principles and the EU & CBI Taxonomies. FSD Africa also offered technical assistance towards securing Second Party Opinion (SPO) for NMB Bank’s Sustainable Finance Framework.

Mark Napier, Chief Executive of FSD Africa, said: “Listing of the NMB sustainability bond on the LSE is a great milestone, and it signals the potential that entities in the African region have to tap sustainable finance both within and beyond the African continent.  Mobilising long-term capital at scale on the African continent continues to benefit from the collaborative partnerships from the city of London, and we are pleased to have extended technical assistance in support of NMB’s issuance of both their gender bond in 2022 and the sustainability bond in 2023.”

The NMB listing is expected to contribute to Africa’s climate finance needs – estimated at $277 billion annually to implement its NDCs and meet 2030 climate goals. From 2019 to 2020, private sector financing represented only 14 per cent of all of Africa’s climate finance, according to a report by the Climate Policy Initiative.

The successful issuance of the Tanzanian shilling and U.S. dollar Jamii Bonds on the Dar es Salaam Stock Exchange in December last year highlighted the growing capacity of local investors to meet the rising demand for climate and sustainability financing. The bonds align with the Sustainability Bond Guidelines of the International Capital Markets Association, which prescribe transparent and accurate reporting to stakeholders.

Issued in both local currency and the US Dollar, the dual-tranche bond raised a total of TZS 400 billion ($159 million) from both local and international investors in its initial offering. BII, as an anchor investor, committed $15 million equivalent in Tanzanian shilling to the bond. It is the US dollar tranche that will be listed on the London Stock Market.

FSDAi Nyala Facility invests US$ 1 million in Linea Capital to boost funding opportunities for small and growing businesses in South Africa.

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FSDAi Nyala Facility BV, a facility set up by FSD Africa Investments to invest in emerging local capital providers, is injecting US$1 million into Linea Capital, a South Africa-based financier. Linea Capital specializes in revenue-based finance (RBF), an innovative model that supports the growth of Small and Growing Businesses (SGBs).

Most SGBs on the continent are faced with limited funding options, and this is no different in SouthAfrica. Traditional debt either requires significant collateral or is unaffordable, while equity investments dilute ownership, control and long-term economic value and often involve lengthy negotiations on valuation.

By contrast, Linea Capital’s revenue-based financing solution is a collateral-light and non-dilutive source of capital, with repayments structured around the company’s revenue cycle to reduce the burden of fixed monthly repayments. Although driven by the investee’s revenue growth, the typical term of Linea’s financing ranges between 2 and 3 years. Linea also offers a range of post-investment support services aimed to help businesses manage growth.

FSDAi Nyala Facility’s investment will be through junior funding tranches to enable Linea to raise lower cost senior debt, with the intention of crowding-in local and global institutions seeking lower risk and more liquid non-equity investments.

This is the Facility’s third investment; previous investments include Aruwa Capital Management, a Nigeria-based fund that targets growing companies that either serve the expanding female economy or are led by women or gender-diverse teams, and WIC Capital, a Senegal-based manager that not only provides much needed capital but also technical assistance and access to business networks for female-led businesses in the region.

Speaking during the announcement, FSD Africa Investments’ Chief Investment Officer, Anne-Marie Chidzero hailed the novel financing instrument. “We are excited to collaborate with Linea Capital to accelerate local financing for small and growing businesses. This investment demonstrates FSDAi Nyala Facility’s mandate of backing innovative financing solutions that position these businesses to thrive and drive economic growth,” noted Anne-Marie.

Linea Capital cofounders Julia Price and Colin Hundermark welcomed the investment which will translate to an attractive capital alternative for small and growing South African companies “We are delighted that FSDAi Nyala Facility is making this investment with us. It provides further support for revenue-based financing as an alternative for the owners and founders of SGBs in South Africa, and we are excited about how it will assist us in raising further capital to support the growth of a vital segment of our economy,” they explained.

FSD Africa Investments and Allied Climate Partners collaborate to attract catalytic equity to African funds focused on early-stage, climate-related opportunities

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FSD Africa Investments and Allied Climate Partners have today entered into an Memorandum of Understanding and will partner to address a critical financing gap for climate infrastructure, mitigation and adaptation in Africa. This aligns with the core missions of both organizations: to increase the number of bankable opportunities for climate-related investment, increase private sector participation, improve livelihoods, and mitigate the effects of climate change across Africa.

FSD Africa Investments (FSDAi) invests to make finance work for Africa by allocating catalytic capital to market shaping instruments, intermediaries and infrastructure and has cumulatively invested US$ 105 million with a portfolio of 19 projects.

Allied Climate Partners (ACP) seeks to aggregate approximately US$ 825 million backed by US$ 235 million in philanthropic capital to support the establishment of third-party funds, platforms, and other investments in early and development stages of climate-related projects in Africa, Southeast Asia, India, and the Caribbean & Central America. Allied Climate Partners invests junior, first-loss equity in regionally focused third-party funds. ACP announced its inaugural investment into the Southeast Asia Clean Energy Fund II, managed by Clime Capital, in January, and is seeking to replicate similar investments in other regions.

Speaking during the MoU signing ceremony on the sidelines of the ongoing AVCA annual summit in Johannesburg, South Africa, FSDAi Chief Investment Officer Anne-Marie Chidzero hailed the collaboration as one that will support Africa to meet her ambitious climate finance goals.

“For the African continent to meet her NDCs, we must raise tenfold current annual climate finance levels to US$ 277 billion, and the share of private capital to at least US$ 100 billion. Working with ACP, we will be able to catalyse and crowd in more innovative and green finance for greater action”, said Chidzero.

ACP Chief Executive Officer Ahmed Saeed noted that this collaboration will drive innovation across the African continent, specifically mobilising more climate finance for Africa.

“There is a critical gap in climate finance, and specifically risk-oriented equity, available for emerging and developing economies to meet climate and energy transition goals. We are thrilled to partner with FSDAi, a pioneering organisation at the forefront of strengthening private sector participation and financial markets in Africa. Together, we hope to attract more risk-oriented capital for early-stage investments in Africa, by establishing new, catalytic, blended finance solutions that will leverage public and private capital to tackle the climate crisis”, explained Saeed.

Working in concert, FSD Africa Investments and Allied Climate Partners will identify, evaluate, and seek to invest in highly catalytic financing solutions in Africa that increase investment for early-stage project development and companies deploying climate-related infrastructure in Africa. The sectors to be targeted owing to their potential to accelerate a low-carbon transition and improve livelihoods include: clean energy generation and transmission; electric transportation; green industry; and, water and waste management. Selected investment managers will seek to invest in high-leverage and catalytic projects, platforms and companies with demonstrable and positive impact on climate in Africa, and which have the potential to mobilise third-party capital at scale.

Ethiopian Securities Exchange (ESX) Closes Its Capital Raise Significantly Oversubscribed by Domestic and Foreign Investors

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The Ethiopian Securities Exchange (ESX) announced today the successful closing of its capital-raising exercise, surpassing by more than two-fold the amount of funds it sought to start its operations. Initiated in November 2023, with intensive efforts by its management and advisors and roadshows in Addis Ababa, Nairobi, and London, the Exchange witnessed dramatic interest by domestic and foreign commercial investors, obtaining a whopping ETB 1.51 billion (US$ 26.6 million), representing subscription of 240% of its initial target capital raise of ETB 631 million (US$ 11.07 million), with participation by a total of 48 domestic and foreign institutional investors across financial and non-financial sectors.

ESX was established in October 2023 through a pioneering public-private partnership with the Government of Ethiopia through the Ethiopian Investment Holdings (EIH), its strategic investment arm, as the founding shareholder, with a mandated total public shareholding of up to 25%, with the remaining 75% to be private shareholding.

At present, the list of investors includes foreign strategic investors, including FSD Africa, the Trade and Development Bank Group (TDB), Nigerian Exchange Group (NGX), along with 16 domestic private commercial banks, 12 private insurance companies, as well as 17 other private domestic investors. Public sector interests, jointly representing 25% of shareholding, include EIH and its subsidiaries such as Ethiotelecom and the Commercial Bank of Ethiopia, among others.

The overwhelming interest as investors rallied around the Exchange, up to the close of the capital raise period, signals the enthusiasm and confidence that the ESX heralds a major milestone in the country’s journey towards financial sector development and economic transformation. By facilitating the mobilisation of capital, enhancing transparency, and promoting corporate governance standards, ESX aims to unlock new avenues for investment, spur entrepreneurship, and catalyse sustainable development across various sectors of the economy.

“We are thrilled to have exceeded all our expectations in terms of the capital raise and are excited by the overwhelming confidence shown by investors in the long-term prospects of both ESX and Ethiopia’s capital markets more broadly,” said Tilahun Esmael Kassahun (Ph.D), CEO of the ESX, adding that “strategic foreign investments by TDB, FSD Africa, and NGX Group are particularly important in allowing the transfer of technical knowhow and best practices as well as other areas of long-term strategic value that we will explore.”

ESX also announced today other progress, including the release of its draft Exchange Rulebook for public consultation, the completion of the technical evaluation for the selection of its technology provider, a major milestone to operationalising the Exchange’s trading, and issuer and investor education plans in the coming months leading up the launch of this exciting development for the Ethiopian economy.

Nairobi Climate Network announces the launch of the Carbon Markets Association of Kenya

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The Nairobi Climate Network (NCN), a thriving community of professionals propelling climate action in Kenya, is pleased to announce the upcoming launch of the Carbon Markets Association of Kenya (CAMAK) at a networking reception during the Kenya Carbon Markets Conference 2024.

This networking launch event is co-hosted by the Climate Impact Partners and supported by FSD Africa and Bowmans Law. It will bring together government officials, private sector leaders, financial institutions, and carbon markets experts to mark the establishment of this groundbreaking association. The partners congratulate the Kenyan government on the progress made to the forthcoming regulations and look forward to seeing Kenya leverage the potential of carbon markets for the benefit of its population and the planet.

The Carbon Markets Association of Kenya, incubated by the Nairobi Climate Network (NCN), represents a pivotal step in Kenya’s journey towards building a collaborative and enabling environment for high-quality and inclusive carbon projects. CAMAK’s vision is for Kenya to lead the world in generating high-quality carbon credits that bring tangible benefits to communities and the planet. Its mission is to unite carbon market practitioners and stakeholders, providing a collective voice for the industry in Kenya, while upholding the values of integrity, collaboration, and innovation.

CAMAK’s initial activities will focus on representing industry players, advocating for carbon market developments, and facilitating the sharing of best practices within the sector. Membership requirements include being registered in Kenya and actively engaging in project development or contributing to carbon market finance, research, or advisory. Fees will consist of an admission fee and an annual membership fee, with discounted rates for small-scale developers. During its setup phase, CAMAK will be incubated within the Nairobi Climate Network (NCN) with an interim governing council, which includes prominent industry figures such as Mahlon Walo, Bryan Adkins, Héloïse Zimmermann, Tarn Breedveld, Olivia Adhiambo, Molly Brown, and Charles Waweru.

“We congratulate the Kenyan government on the progress made in carbon market regulations and are proud to have played a role in supporting these developments. We are delighted to transform our carbon markets working group into a formal industry association for the advancement of carbon markets in Kenya.” Héloïse Zimmermann, Co-Founder, Nairobi Climate Network

“The launch of CAMAK demonstrates another significant step towards harnessing the potential of carbon markets for Kenya, and strengthening Kenya’s pathway to climate-positive growth. We look forward to engaging with the Association to continue the dialogue with industry players and ensure the development of high quality, inclusive carbon projects for Kenya.” Ali Mohammed, Special Envoy for Climate Change, Executive Office of the President of Kenya

“As developers of high-quality carbon projects, Climate Impact Partners is proud to support the establishment of CAMAK. This initiative reflects our shared commitment to advancing carbon markets in Kenya whilst unlocking new opportunities for sustainable development.” Faith Temba, Sourcing Manager, Climate Impact Partners

“Kenya has made impressive progress with its revised carbon markets regulations and is now in a strong position to leverage the potential of carbon markets for the benefit of its population and the planet. By bringing together industry players and stakeholders, CAMAK will play a crucial role in advancing carbon markets and climate finance, helping to accelerate climate action in Kenya” Mark Napier, CEO, FSD Africa

“Bowmans Law is pleased to see proactive engagement by the Kenyan government on the recent legislative developments, that will enable Kenya to realise the opportunities from carbon markets. We are proud to support the launch of CAMAK and see collective action from industry players helping to create a more enabling environment for carbon projects and leading to direct benefits for communities in Kenya.” Christina Nduba-Banja, Partner, Bowmans Law

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For media inquiries or further information, please contact:

Name: Samson Berhane

Title: Communications & Advocacy Specialist

Organization: FSD Africa

Email: samson@fsdafrica.org

Phone: +251937447258

About the National Bank of Ethiopia:

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

 About FSD Ethiopia:

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

Please mention Tadpole’s organisation

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

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Embargoes until 22nd February 2024, afternoon.

 Tanga

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

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

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

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

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

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

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

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

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

END

SWISS RE Foundation extends funding support to BimaLab Africa Insurtech accelerator I

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The acclaimed and innovative Bimalab Africa Insurtech accelerator program by FSD Africa is now set to expand to cover a total of fifteen countries across the African continent from the initial ten countries covered in the 2023 program, following a US$ 600,000 support by Swiss Re Foundation.

Launched in Kenya by FSD Africa in 2020 and supported by the Swiss Re Foundation since 2023, the BimaLab Africa Insurtech Accelerator Program offers hands-on venture-building support to high-impact insurtech start-ups that improve the resilience of underserved and climate-vulnerable communities.

In this extension of the Foundation’s support through 2025, BimaLab will expand its footprint to accelerate 55 insurtechs in a total of 15 African countries. It will build strong innovation ecosystem by activating investors, capacity-building networks, and corporate institutions to unlock capital, attract talent and share knowledge about insurance solutions tailored to those communities’ needs.

BimaLab Africa addresses problems faced by vulnerable communities and businesses, it gives priority to enterprises that address challenges on climate change, health and gender as well as obstacles faced by micro, small and medium enterprises. Africa’s protection gap, or uninsured losses, for natural catastrophes was around 80% of the total economic losses they caused in 2022, up from 58% one year earlier. These figures highlight the severity and volatility of the region’s natural disasters as well as its lack of financial protection against them. BimaLab Africa will create an insurtech innovation ecosystem that supports the growth of insurtechs; reach underserved markets, communities and households.

“Insurance provides a crucial safety net when people experience threats like natural disasters, ill health or economic disruption.  We are proud to scale our partnership with BimaLab Africa, an initiative we strongly believe in. Bimalab Africa supports the growth of insurtechs, their reach to underserved markets, communities and households. It creates an insurtech innovation ecosystem in Africa. ” said Stefan Huber Fux, Director of the Swiss Re Foundation.

Bimalab Africa program is a unique programme bringing together insurance innovators, technology partners, insurance firms, investors, and regulators to work in concert in unlocking industry bottlenecks in modernising insurance services. Previously Bimalab Africa has had chapters supporting insurtechs in Egypt, Ethiopia, Ghana, Kenya, Morocco, Nigeria, Rwanda, South Africa, Uganda, and Zimbabwe. Among the new countries where the programme seeks to spread wings to are Tanzania, Tunisia, Senegal, Zambia, Malawi, and Somalia.

FSD Africa Principal Innovation and Resilience and Bimalab Africa Programme Lead Elias Omondi says the impact of the programme has been phenomenal over the last four years in expanding the reach of the program and playing a catalytic role in innovation by developing products for vulnerable customers and attracting investors to insurtech startups.

“BimaLab Africa enables startups enjoy access to a structured learning environment, mentorship, funding connections and a network of like-minded entrepreneurs, financiers, tech companies and regulators that can help them grow their businesses.  We have supported 63 startups since 2020 and facilitated development of 3 regulatory sandboxes. Furthermore, investors have supported ten ventures providing over US$10 million in funding and over 40 products developed have reached more than 3 million new customers reached” said Elias Omondi, Principal from FSD Africa.

Insurance penetration in Africa has been lagging compared to other parts of the globe at only 3% compared to the world average of 7%. Innovation and technology are expected to play a key role in addressing the challenge.

FSD Africa and African Guarantee Fund partner to boost Green SME Financing

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Nairobi, Kenya, 09 February 2024: FSD Africa, a pioneering development agency committed to reshaping Africa’s long-term financial landscape, and the African Guarantee Fund (AGF), a leader in promoting financing of Small and Medium-sized Enterprises (SMEs) across Africa, have today signed a strategic Cooperation Agreement aimed at propelling the growth of Green SMEs by providing critical financial support, technical assistance, and capacity building.

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

FSD Africa and African Guarantee Fund partner to boost Green SME Financing

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

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

Jules Ngankam, AGF Group Chief Executive Officer said: “Fostering a green economic transformation in Africa is one of our key priorities. Through this partnership, AGF will provide financial institutions with bank fundraising guarantees to enable them access affordable funds aimed at facilitating loans to SMEs investing in low carbon and climate resilient businesses. Additionally, AGF will extend partial credit guarantees to lenders in a bid to enhance credit accessibility for Green SMEs, empowering them to flourish and make meaningful contributions to environmental conservation.

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

For more information, please contact:

FSD Africa
Nelson Karanja
Director, Communications, and Engagement
Email: nelson@fsdafrica.org

African Guarantee Fund
Diana Aluga
Group Communications & Public Relations Officer
Email: diana.aluga@agf.africa

About African Guarantee Fund

African Guarantee Fund (AGF) is a specialized guarantee provider whose mission is to facilitate economic development and poverty reduction in Africa. To achieve this, AGF increases access to finance for Small and Medium-sized Enterprises (SMEs) across key economic sectors through an array of guarantee products and capacity development assistance. Since inception, AGF has unlocked more than USD 3.5 billion in SME financing, through partnerships with 200 partner financial institutions across 40 African countries.

AGF is backed by the following shareholders and sponsors: The Government of Denmark through the Danish International Development Agency (DANIDA), the Government of Spain through the Spanish Agency for International Cooperation (AECID), the African Development Bank (AfDB), French Development Agency (AFD), Nordic Development Fund (NDF), Investment Fund for Developing Countries (IFU), German Development Bank (KfW), French Agency for Private Sector (PROPARCO), West African Development Bank (BOAD), Global Affairs Canada (GAC), USAID’s West Africa Trade & Investment Hub (WATIH), TechnoServe and Mastercard Foundation.

African Guarantee Fund is rated AA- by Fitch Ratings.

For more information, please visit: www.agf.africa