Category: Press release

BURN Issues Usd $10m Green Bond to Support Clean Cooking In Sub-Saharan Africa

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  • First-ever green bond issued in Sub-Saharan Africa designated for clean cooking financing.
  • Proceeds from the green bond will accelerate the distribution and adoption of sustainable cooking solutions to households across Africa.

Nairobi, 27th October 2023… BURN Manufacturing (BURN), the world’s leading clean cookstove manufacturer, distributor, and carbon-offset project developer, announces the issuance of Sub-Saharan Africa’s first-ever green bond designated for clean cooking financing of USD $10 Million.

The proceeds from the bond will allow BURN to increase existing manufacturing capacity in Kenya as well as launching a new manufacturing facility in Lagos, Nigeria. Production will increase from the current 400,000 units per month to 600,000 units and will produce a range of life-saving biomass, electric and LPG stoves.

BURN stoves have been independently verified by reputable institutions such as University of Pennsylvania, University of Chicago, as well as through a comprehensive impact assessment survey conducted by Yunus Social Business. The stoves have consistently been proven to provide substantial health, financial, and climate action benefits. The funds from the Green Bond are poised to extend these benefits to an extra 2 million households in the year 2024.

“Our decision to issue the first green bond to support clean cooking underscores our strong belief in the power of financial innovation to drive positive environmental and social change. Leveraging benefits such as investment communities’ interest in green financing and potential tax advantages to investors, green bonds have gained considerable traction in recent years. BURN is excited to deploy this innovative instrument to catalyze sustainable development” said Peter Scott, CEO and Founder of BURN.

The bond issuance was supported by DRY Associated Limited acting as the Placement Agent. FSD Africa, a specialist development agency funded by UK International Development, played a key role in providing technical input on the bond framework and contributing technical assistance for the second-party opinion which was conducted by Agusto & Co., the leading Pan-African Credit Rating Agency and Green Bond Verifier.

Commenting on the announcement, Evans Osano, Director, Capital Markets, FSD Africa, said: “We are proud to have supported this landmark issuance, the first-ever green bond to finance clean cooking activities in sub-Saharan Africa. Biomass fuel is the main source of energy for cooking for the majority of households in Africa and the proceeds from this capital raise will support these households to transition to more sustainable alternatives. These are not only better for the environment but also have health benefits from the reduction of particulate and carbon monoxide emissions which particularly impact women given their greater exposure.”

Ikechukwu Iheagwam, Regional Director (East Africa) Agusto & Co. Said “We are delighted to have supported BURN Manufacturing in providing a Second Party Opinion (SPO) on this landmark issuance of the first-ever green bond to finance clean cooking in Africa. BURN displayed transparency in its pursuit to reduce greenhouse gas emissions following the very detailed scientific process backed by international standards and robust laboratory testing to ensure that the cookstoves consume less wood and charcoal fuel at ISO/IWA Tier 4 thermal efficiency ratings levels. While this project is expected to have a significant positive environmental impact in terms of tons of firewood saved and tons of carbon dioxide emissions mitigated for each stove manufactured, the catalytic social, financial, economic and health benefits are quite compelling.”

“Dry Associates is proud to be the Transaction Advisor on BURN’s Green Bond programme. The Green Bond programme underscores the opportunities available for fixed-income investments in Kenya to catalyze capital formation, employment, and economic growth. We are attracted to BURN for the leadership team’s focus, green finance acumen and the scale and professionalism of BURN’s manufacturing operation in Kenya. BURN’s export growth story is a stellar example that Kenya can indeed deliver quality to the world” added Reuben Mabishi, Head of Research from Dry Associates Investment Bank.

A 2022 report by the International Energy Agency on the Africa Energy Outlook suggests that achieving universal access to clean cooking fuels and technologies by 2030 requires shifting 130 million people globally away from dirty cooking fuels each year.  The issuance of green bonds provides a crucial avenue for supporting this shift towards the adoption of cleaner cooking solutions for people.

The notes have been issued by way of a private offer to a select group of institutional and qualified investors in accordance with Regulation 21 of the Capital Markets (Securities) (Public Offers Listings and Disclosures) Regulations, 2002. An Information Notice has been provided to the Capital Markets Authority.

About BURN

 Founded in 2011, BURN was created with the aspiration to save lives and forests by revolutionizing the clean cookstove sector. While traditional, inefficient cookstoves can bankrupt families, damage their health and destroy forests, BURN’s best-in-class stoves can save families money on fuel, limit indoor air pollution and protect forests. BURN is now Africa’s leading clean cooking company and one of the only carbon-offset project developers to cover the full carbon value chain, from project design and in-house monitoring to credit issuance. Headquartered in Kenya and with direct operations in 10 African countries, BURN employs 2,500 people across Africa. The company has made and distributed over 4 million clean cookstoves, transforming the lives of over 22 million people and avoiding 17 million tons of CO2 from entering the atmosphere. Learn more at burnstoves.com.

About Agusto & Co.

Agusto & Co. is the leading Pan African credit rating agency and a business information provider, with offices in Nigeria (Lagos), Kenya (Nairobi) and Rwanda (Kigali). Agusto & Co. was licensed by the Capital Markets Authority (CMA) of Kenya as a Credit Rating Agency in 2013. The company is a foremost research house and an expert voice on the major economies, industries and businesses operating in sub-Saharan Africa. Agusto & Co. is an Approved Verifier by the Climate Bonds Standard with the capacity to perform verification of green bonds, projects and assets in Africa. Also, Agusto & Co. is one of the companies that have voluntarily aligned with the International Capital Market Association’s (ICMA) Guidelines for External Reviewers for the adoption of Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines and Sustainability-Linked Bond Principles.

Envolt launches pioneering MUR 2.0 billion green bond programme for major solar energy projects in Mauritius, supported by MCB Capital Markets and FSD Africa

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23rd October 2023, Port Louis, Mauritius – Envolt, the renewable energy production arm of ENL Group, supported by transaction advisor MCB Capital Markets as well as FSD Africa, has announced its intention to undertake a green bond issuance of MUR 2 billion (approximately USD 45 million), with a tenor of between three and seventeen years.

The landmark transaction, under the SADC Green Bond Programme, has been initiated by a first issue of MUR 510 million (equivalent to approximately, USD 11 million) and will be completed by the 31st of December 2028 (as stipulated in the Programme Memorandum), will finance the construction and operationalisation of thirteen new solar farms in Mauritius, boasting an aggregate capacity of 14.4 MW and to be completed over a period of 10-17 months.

The issuance represents a major milestone for the Mauritian renewables sector, as well as the country’s capital markets, being the first green project bond issuance for the financing of a renewable energy in the country. Moreover, these green project bonds will constitute the first of their kind issued in Mauritius under the Green Bond Principles 2021 (as devised by the International Capital Market Association (ICMA)), which are in alignment with global standards and militate against greenwashing by mandating rigorous evaluation of projects and their respective environmental or emissions claims.

Crucially, this bond programme will accelerate the maturity and expansion of Mauritius’ capital markets and advance the country’s efforts to attract private capital investment to the country. As importantly, the bond issuance will contribute to the strengthening of green sustainable finance in Africa, as a demonstration of its capacity to finance vital infrastructure projects indispensable for wider economic development.

The UK Government established FSD Africa in 2012 and has been its sole funder since. Over time, FSD Africa has become the leading financial sector development organisation on the continent. FSD Africa was delighted to support Envolt, as well as its transaction advisor MCB Capital Markets, on the bond programme, the Green Bond Framework and its independent review.

FSD Africa launched its green bonds programme in Kenya in 2017 as part of its mission to make finance work for Africa’s future and has since expanded it to cover 20 African countries including Nigeria, Mauritius, Morocco and the Southern African Development Community (SADC) region, consisting of 16 countries. It works with governments on policy reforms and development to promote private investments and domestic capital mobilisation through green/sustainable bonds and other instruments (including gender bonds) supports banks and corporates to structure and bring these products to market and further supports industry initiatives such as developing a pool of local accredited green bond verifiers. The programme has so far resulted in more than US$ 1 billion worth of transactions for sustainable/climate-linked projects and assets, the creation of more than 50,000 direct and indirect jobs and increased access to clean energy, clean water and clean transport for more than 3 million people.

Gilbert Espitalier-Noel, CEO ENL Group, said: “Our group positions itself as a major player in the renewable energy sector. Our initiatives align with the national strategy to produce up to 60% of Mauritius’ energy needs from renewable sources by 2030. Our green bond program will finance the expansion of our production capacity and enable us to contribute significantly to improve the country’s energy mix and energy security.”

Rony Lam, CEO MCB Capital Markets, said: “We are proud to have advised EnVolt on this transaction, which sets international standards for the issuance of green project bonds in Mauritius. This success reflects the rapid development of the local currency bond market over the past eight years. Mobilising national resources to finance the local economy and infrastructure projects is essential for the development of the African continent.”

Mark Napier, CEO FSD Africa, said: “FSD Africa is pleased to have supported everyone involved in this historic green bond issuance by EnVolt, which we hope sets a precedent for further such transactions not only in Mauritius but also across the wider SADC region, building the strength of domestic African capital markets and, crucially, delivering financing routes for vital energy transition projects which can accelerate Africa’s energy and climate security.”

Charlotte Pierre, British High Commissioner to Mauritius, said: “International bond markets remain among the most effective and good-value options for financing countries’ energy transition and major infrastructure investment programmes, and we hope many more states follow Mauritius’ example.”

FSD Africa @ AFSIC 2023

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This year FSD Africa joins AFSIC 2023 in celebrating their 10-year anniversary with a decade of impact in strengthening and greening financial markets in Africa. At AFSIC 2023, FSD Africa will host an afternoon of high-profile dialogue including sessions entitled Leveraging Carbon Markets for Africa’s Green Transition, Africa’s Green Future, Harnessing the Power of Finance for Nature and Novel Financing Structures to Unlock Africa’s Climate Agenda.

FSD Africa, one of AFSIC 2023’s top sponsors, is focused on making finance work for Africa’s future. From its base in Nairobi, Kenya, its 35 financial sector experts work alongside partners to design and deliver programmes in more than 30 countries across Africa with the aim of driving large-scale change in financial markets and accelerating the role of finance in Africa’s green economic growth. Panel content at AFSIC 2023 will feature excellent invited speakers who are leaders in their field, and they will take advantage of discussing the below hot topics ahead of the November 2023 COP28.

Leveraging Carbon Markets for Africa’s Green Transition

According to some estimates, carbon offsets in the form of tradable carbon credits could generate billions of dollars for African countries by 2030 offering a major source of funding for the continent’s green economy. The recent auction in Nairobi, Kenya, of 2.2m carbon credits organised by a Saudi company was an indication of the huge demand and the opportunity that the voluntary carbon market presents for Africa and for investors interested in supporting Africa’s green transition. But there are many challenges that need to be overcome including concerns over regulation, market integrity, pricing, and transaction costs.

In this fireside chat, leading entrepreneur James Mwangi, co-founder of Dalberg Advisors, founder of the Climate Action Platform for Africa and CEO of Africa Climate Ventures, a venture-builder focusing on carbon mitigation, capture and removal, discusses the opportunities for companies and investors and the challenges facing the market.

Africa’s Green Future: Unlocking Capital for Climate-Positive Growth

Africa has the potential to achieve both climate targets and economic prosperity through a climate- positive growth path. However, this requires substantial investment and creative solutions across the finance sector. From small climate-tech start-ups to large sustainable infrastructure projects, mobilising capital is crucial to realising this ambition.

In this session delivered in a TED talk style, experts from capital markets in Africa and globally will discuss how innovative approaches in finance can transform green growth and resilience on the continent. By unlocking capital and fostering collaboration, Africa can pave the way for a sustainable and prosperous future.

Harnessing the Power of Finance for Nature

This session will present current investable nature-positive opportunities for institutions. High-level speakers from both financial institutions and development organisations will discuss the role of governance and frameworks such as the TNFD (Taskforce on Nature Related Financial Disclosures) as a catalyst for investment in nature. The session will also elicit debate and discussion on the role of finance in enabling nature conservation from the perspectives of the real economy for instance by presenting examples of where financing for nature has worked in Africa.

Novel Financing Structures to Unlock Africa’s Climate Agenda

Africa faces significant challenges in financing its climate agenda with traditional funding models often insufficient for implementing ambitious climate projects across the continent. To overcome this, novel financing structures are emerging as solutions to unlock the necessary resources. These new financing approaches go beyond traditional grants and loans to encompass mechanisms such as climate bonds, green bonds, carbon exchanges and alternative investment vehicles along with instruments that reduce private investment risk including guarantees, insurance, and blended capital, as well as public-private partnerships.

This panel discussion brings together experts to discuss innovative financing approaches, identifying key success factors and the challenges and how they can be overcome. The session will also highlight the importance of collaboration and partnerships between various stakeholders in mobilising resources and driving climate action in Africa.

African financial institutions pledge to protect and restore nature in landmark statement

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“Nature Voices Pledge” will be launched at a Presidential Panel on nature at the Africa Climate Summit

Nairobi, September 5th, 2023: Some of Africa’s largest financial institutions are backing a call to conserve and restore nature amid a biodiversity crisis that threatens the wellbeing and livelihoods of tens of millions of its people.

The landmark “Nature Voices Pledge” is being launched by the African Natural Capital Alliance (ANCA), a collaborative membership organisation whose collective assets total US$390 billion. Among its members are major financial institutions such as Standard Chartered, KCB, Equity Bank, Ecobank, Access Bank, DBSA, Zanaco, FirstRand, Investec, Sanlam, Old Mutual, CalBank, ICEA LION and Fidelity Shield.

The Pledge commits the ANCA membership, which also includes governmental organisations such as the Ghana Ministry of Environment, Science, Technology and Innovation (MESTI) and civil society organisations including the African Wildlife Foundation, to support conservation and restoration efforts, integrate nature into their decision-making and promote sustainable financing solutions.

It comes amid growing evidence that the natural capital on which tens of millions of Africans depend is being lost due to factors including overexploitation, overpopulation, land-use changes and climate change. The value of the natural capital lost to Africa every year is estimated to be $195 billion according to the United Nations Environment Programme (UNEP).

The “Nature Voices Pledge” is to be announced at a Presidential Panel titled “Pioneering the Future of Nature in Africa” which is being hosted by the Africa Climate Summit 2023 on 5th September 2023

The event, which is being supported by ANCA, brings together leaders from several African nations including the Presidents of Rwanda, Republic of Congo and Burundi, to engage in a high-level dialogue on the future of nature in Africa. It will provide a platform for African leaders to discuss key challenges, opportunities, and policy interventions aimed at promoting nature and biodiversity for sustainable development across the continent.

The ‘Nature Voices Pledge’ encapsulates the shared commitment of ANCA’s member institutions to prioritise nature-positive practices and integrate environmental considerations into their core operations. It highlights three key principles that underline ANCA’s dedication to shaping a more sustainable and resilient Africa:

  • Acknowledging the Importance of Nature
  • Emphasizing the African Context
  • Assuming Responsibility

The Pledge also sets out a set of concrete actions ANCA members will take to achieve their nature-centred goals:

  • Support Nature Conservation and Restoration
  • Integrate Nature into Decision-Making
  • Promote Sustainable Financing Solutions
  • Strengthen Transparency and Reporting
  • Support Alignment of Policies and Regulations
  • Foster Collaboration and Knowledge Sharing

This historic commitment underscores the group’s urgency and conviction in driving transformative change toward a sustainable future for Africa.

Dorothy Maseke, Head of ANCA Secretariat and Lead of Nature Finance at FSD Africa, said:

“We in Africa are privileged to live on a continent so rich in natural capital but we must also recognise that our economy and our well-being depends on using it sustainably. This landmark pledge signifies that the members of ANCA are determined to play our part by putting nature at the heart of decision-making, so we reflect its true value and drive investment into activities which conserve and enhance nature rather than destructive activities for short term gain.”

Kaddu Sebunya, CEO, African Wildlife Foundation, said:

“As we stand on the cusp of the Africa Climate Summit, we come with a resounding message of hope, unity, and action. We support the Nature Voices Pledge and believe unity is essential to ensure the realisation of nature’s conservation in Africa for prosperity and future generations. At the African Wildlife Foundation we believe that biodiversity stands as a powerful ally in the face of our pressing climate challenges. We understand that acknowledging biodiversity’s pivotal role is the key to a harmonious future for both nature and humanity.”

FSD Africa Investments Commits US$19.5 Million To Boost Climate Resilience In Africa

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Investments in Acre Impact Capital’s Export Finance Fund, Catalyst Fund and Camco’s Spark Energy Services will help bridge financing gap for green projects

Nairobi, 5th September 2023 – FSD Africa Investments (FSDAi), the investing arm of FSD Africa, today announces new investments totalling US$19.5 million to support climate adaptation and climate-aligned infrastructure projects in Africa and to promote the continent’s resilience to climate change.

The investments in Acre Impact Capital’s Export Finance Fund I, Catalyst Fund and Camco’s Spark Energy Services, demonstrate FSDAi’s commitment to partnering with local asset managers and venture builders to support climate-smart projects that would otherwise struggle to access the finance they need.

The new commitments include:

  • US$12 million in Acre Impact Capital’s Export Finance Fund I, the first to address the lack of commercial debt financing for sustainable infrastructure projects guaranteed by official Export Credit Agencies (ECAs). Financing from ECAs reduces the cost of debt and makes infrastructure projects more affordable. However, in order to access ECA support, project sponsors have to make a down payment of ~15% of the project value using commercial debt which is increasingly scarce. FSDAi’s investment in Acre will facilitate the flow of ECA finance for social and green infrastructure, mobilising US$ 67 million directly related to FSDAi’s investment, providing improved access to essential services for over 500,000 people and generating over 2,000 jobs.
  • US$4.5 million in Catalyst Fund, a pre-seed venture capital fund and accelerator that will invest in and provide hands-on venture building support to tech start-ups that aim to improve the resilience of climate-vulnerable communities across Africa. The investment will help demonstrate venture building as an investible model that can accelerate the growth of climate-smart businesses in Africa with a target of creating or accelerating 40 businesses and helping 5m individuals and households to adapt to the effects of climate change.
  • US$3 million into Spark Energy Services (Spark), which is designed and managed by climate and impact fund manager Camco to provide financing to captive solar and energy efficiency developers in Sub-Saharan Africa. The platform seeks to address the lack of financing available to developers of smaller scale projects by innovatively aggregating small projects to reduce transaction costs and diversify risk. FSDAi’s investment in Spark will support a just transition and achieve local development benefits by facilitating a 0.61m MtCO2e (million metric tons of carbon dioxide equivalent) net reduction in greenhouse gas emissions, working in partnership with local developers, creating 1,400 jobs and providing a lower cost, reliable and clean power supply to commercial and industrial SMEs.

FSDAi makes investments in support of ‘innovative’ financial instruments, facilities and intermediaries that can accelerate the role of finance in Africa’s green economic growth. It is funded through UK International Development from the Foreign, Commonwealth & Development Office (FCDO).

One of FSDAi’s distinctive features is its mandate to take significant investment risk. FSDAi fills an important funding gap by assuming the commercial risk of novel financial solutions that neither development finance institutions nor private investors are prepared to take.

The new investments will be announced by Andrew Mitchell, UK Minister for Development, at a joint event being held by FSD Africa and PIDG during the Africa Climate Summit on September 5th.  It is one of a number of transactions and market building initiatives being unveiled by FSD Africa during the Summit which are designed to create a more innovative financing environment and so boost the participation of international and domestic private capital in Africa’s green economy.

Commenting on the investments Andrew Mitchell, UK Minister for Development, said:

“The climate finance projects we announced demonstrate the strength of our commitment to Africa’s green future. UK leadership is determined to unlock the funding needed internationally to drive forward the green agenda. Our ambitions can only be realised through partnership and cooperation, with Africa and the international community. We are stronger together – and we go far when we go.”

Anne-Marie, Chief Investment Officer, FSD Africa Investments, said:

“For Africa to achieve a green economic growth pathway, access to green finance needs to be scaled up. Our mission is to enable investments to flow by taking more risk and working with local intermediaries to bridge the gaps in the current financing structures.  We are backing these three funds, which provide innovative ways to finance businesses which will make a big contribution to Africa’s green economy.”

Pan-African Fund Managers’ Association launched to increase cross-border collaboration and drive investment into the green economy

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Nairobi, Kenya, September 04, 2023

In a first for Africa today sees the launch of the Pan-African Fund Managers’ Association (PAFMA), a new trade association bringing together fund managers from across the continent with backing from some of the industry’s most powerful players.

The five founding members of PAFMA are the Pension Fund Operators Association of Nigeria (PENOP); the Fund Managers Association (FMA) in Kenya; the Botswana Investment Professionals Society (BIPS); the Ghana Securities Industry Association (GSIA) and the Investment Management Association of Uganda (IMAU). These national associations, which between them account for assets under management (AUM) of over US$70 billion, have established PAFMA in collaboration with FSD Africa, a specialist development agency working to build and strengthen financial markets across Sub-Saharan Africa

The launch of PAFMA, at an event in Nairobi on 4th September during the Africa Climate Summit 2023 where the founding members will sign an MoU, comes as the industry faces many challenges. These include historically low savings rates – which as of 2021 stood at just 24% of GDP in Sub-Saharan Africa – along with a scarcity of viable investment opportunities and the escalating environmental risks confronting the continent.

Recognising the prevalent dominance of government securities among the current investible assets managed by fund managers on the continent, PAFMA’s primary objective is to foster the adoption of alternative investments. This includes a particular focus on green finance, a pivotal driver for bolstering various sectors of the economy. By championing these alternative investment avenues, PAFMA seeks to not only stimulate job creation but also enhance income generation.

Among its activities, PAFMA aims to spearhead localised research efforts and initiatives to enhance knowledge sharing and capacity building enabling fund managers to evaluate and make investments in regions and countries where they did not previously have a presence. Serving as a proactive advocate, PAFMA will also offer policy insights and champion the interests of its members in both regional and international arenas as well as facilitating regular gatherings of fund managers from across Africa.

Commenting on the launch, Oguche Agudah, CEO, PENOP Nigeria, said:

“I’ve always believed that the solutions to Africa’s challenges lie within us. We need to come together, commit to collaborate, and speak with one voice. The managers of capital on the continent have a unique opportunity to individually and collectively determine to a large extent the trajectory of the continent. Working together, we can achieve so much more. The time is now.”

Patrick Kariuki, Chairman, FMA and Managing Director, Gen Africa Managers Ltd, said:

“The Fund Managers Association is very excited to partner with other like-minded Pan-African Fund Manager Associations. Our industry and its future growth depend on vibrant collaboration amongst fund managers across Africa. With PAFMA, fund managers will be able to evaluate and make investments in regions and countries where we did not have sufficient local context. The Fund Managers Association is honoured to be invited to this exciting and very important initiative.”

Mark Napier, CEO, FSD Africa, said:

“We are excited about the establishment of the Pan-African Fund Managers’ Association which comes at a timely juncture. This association will be integral for African Fund Management organisations to ensure that they share industry knowledge, manage risks with a continental and international view and drive needed investment in critical sectors such as climate mitigation and adaptation. This African-led initiative is a powerful demonstration of our shared vision to transform Africa’s financial and investments sector landscape.”

CRDB Bank hailed for Launching Kijani Bond with Unprecedented 10.25% Interest Rate: A Green Investment Opportunity for All

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Dar es Salaam. 31st August 2023 — The Minister of State, President’s Office for Investment and Planning, Hon. Prof. Kitila Mkumbo, hailed CRDB Bank for ushering in a new era of sustainable investment through the launch of the pioneering Kijani Bond. This historic launch event took place today at the Serena Hotel in Dar es Salaam.

In his speech, Hon. Prof. Mkumbo acknowledged CRDB Bank’s role in providing local institutions a pathway to harness the transformative potential of green bonds. He highlighted the government’s dedication to fostering an enabling environment for investors by enhancing existing policies, laws, and regulations.

“CRDB Bank has already set an exemplary precedent,” he remarked. The issuance of the Kijani Bond, with its multi-currency Medium Term Note (MTN) Programme of USD 300 million, signifies a monumental stride toward realizing Tanzania’s National Financial Sector Development Master Plan 2020/21 – 2029/30, a strategic blueprint to empower both public and private sectors for the greater welfare of the people.

CRDB Bank’s Group CEO and Managing Director, Abdulmajid Nsekela, echoed the sentiment that the Kijani Bond is accessible to all, contrary to misconceptions. He affirmed, “This is an investment that even an average Tanzanian can partake in and benefit from, with a minimum initial investment of just TZS 500,000.” Nsekela underscored the unique proposition of the Green Bond: attractive investment yielding an impressive 10.25% interest per annum. He emphasized the unparalleled stability of this investment, insulating investors from market fluctuations.

The launch of the Green Bond is intrinsically linked with the offer opening, spanning from August 31 to October 6, 2023. Subsequent to this period, the bond will be listed on the Dar es Salaam Stock Exchange (DSE). CRDB Bank anticipates raising TZS 40 billion (with a green shoe of up to TZS 15 billion) during this first phase, which reflects the faith investors place in this innovative financial instrument. The Kijani Bond launch marks a historic moment as CRDB Bank introduces the largest green bond not only in Tanzania but across Sub-Saharan Africa.

“CRDB Bank has often been a pioneer,” remarked Dr. Ally Laay, CRDB Bank’s Board Chairman, who expressed deep gratitude to the Capital Markets and Securities Authority (CMSA) and other stakeholders who contributed to the approval of the green bond. Dr. Laay emphasized that both local and international investors have the opportunity to benefit from this bond, as it offers loans in Tanzanian Shillings or US Dollars.

The CEO of the Tanzania Capital Market and Securities Authority (CMSA), Nicodemus Mkama, lauded CRDB Bank for achieving this historic milestone and reaffirmed the alignment of the green bond with international standards. Mr. Mkama remarked, “We expect that Kijani Bond will be instrumental in further developing green financing in Tanzania.” The CMSA’s endorsement underscores its confidence in CRDB Bank’s commitment to sustainable financing and sets the stage for significant growth in climate financing.

Evans Osano, Director, Capital Markets, FSD Africa, said: “The issuing of this trailblazing green bond demonstrates that Tanzania’s rapidly expanding green economy presents huge opportunities for investors, both international and domestic. As the first green bond to be issued in Tanzania, it is also a major moment for the sustainable finance agenda in Africa and we are proud to have been able to provide the technical assistance.”

FSD Africa is providing technical assistance in Kijani Bond issuance, while Stanbic Bank assumes the pivotal role of lead underwriter and book runner for the forthcoming green bond issue, with Denton Tanzania Law Chamber providing legal advisory services. Orbit Securities Tanzania serve as the sponsoring broker, KPMG is entrusted with the responsibilities of the reporting accountant, and Sustainalytics provides a second party opinion.

The Kijani Bond has garnered the attention of global investors, including The International Finance Corporation (IFC), a member of the World Bank Group. IFC intends to invest 40% of the total issuance, USD 300 million.

To invest in the Green Bond, individuals can visit any CRDB Bank branch or authorized broker. Investment forms are available on CRDB Bank’s official website www.crdbbank.co.tz, and inquiries can be directed to the Customer Service Center via the toll-free number 0800008000.

The issuance of the Kijani Bond demonstrates CRDB Bank’s dedication to environmental, social, and governance (ESG) principles, strengthening its position as a key player in green financing. With a history of sustainable initiatives and recognition from the United Nations Green Climate Fund (GCF), CRDB Bank continues to lead the way in fostering green finance solutions.

 

 

 

FSD Africa Investments injects £10m into InfraCredit to support Nigeria’s Sustainable Climate Infrastructure

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1st August 2023, Lagos – FSD Africa Investments (FSDAi), in collaboration with InfraCredit, have invested £10m into a first-of-its-kind risk-sharing backstop facility, designed to unlock local currency funding for sustainable infrastructure development in Nigeria.

The Risk Sharing Backstop Facility (RSBF) will address the challenge of low credit enhancement by mobilising local institutional investment via bonds into viable early-stage or green-field climate-aligned infrastructure projects.

By increasing the accessibility of finance for the “climate-aligned” infrastructure projects, the facility will help Nigeria accelerate her social and economic development, green economic transition as well as deliver on its climate goals.

Backed by the UK International Development through the Foreign, Commonwealth and Development Office (FCDO), FSDAi is pleased to be undertaking this £10m investment in partnership with InfraCredit – an established player in the sustainable infrastructure financing space.

InfraCredit’s current investments and project pipeline demonstrates the breadth and variety of projects this facility will support, with projects ranging from distributed renewable energy services for urban residences, to commercial and industrial renewable projects, edge-certified green housing and e-mobility infrastructure.

The RSBF will raise funding in series, initially from FSDAi, and eventually from other funders – aiming to reach a total capital base of up to US$50m.This investment therefore aligns with one of FSD Africa’s primary objectives – developing capital markets by tackling blockages in the system

UK Foreign Secretary, James Cleverly MP said:

 “This investment further demonstrates the UK’s commitment and contribution to Nigeria’s transition to clean energy and builds on decades of UK leadership in mobilising support for climate-related infrastructure challenges.”

“Just like the successes of British International Investment (BII) and our Private Infrastructure Development Group (PIDG), I am optimistic that InfraCredit will continue to grow and mobilise even more private sector capital to invest in better, greener infrastructure.”

 Chief Investment Officer, FSD Africa Investments, FSD Africa, Anne-Marie, said: 

“FSDAi’s partnership with InfraCredit on the bridge-to-bond facility introduces a derisking financing solution to mobilize short and medium-term local institutional investment into critically needed infrastructure projects that are currently considered un-bankable without alternative credit enhancement.

 “Moreover, as Africa’s economies struggle to mobilise capital to develop key climate mitigation and sustainable power generation projects, this facility comes as a timely and much-needed intervention for Nigeria’s infrastructure landscape.’’

Chief Executive Officer, InfraCredit, Chinua Azubike, said: 

“I am delighted to work with FSD Africa Investments on an innovative facility which will support much needed but underfinanced projects realise their ultimate goals and purpose.

 “Smart use of catalytic capital can dramatically increase the role of private capital and local intermediaries in investing in Nigeria’s sustainable infrastructure space and help the country develop responses to the significant challenges which confront it from the deteriorating environment and ecology to an unstable energy mix and severe social inequality.” 

New report lays out urgent actions, that regulators can take to safeguard the new agenda for nature – key to Africa’s financial future

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Nairobi, 25 July 2023: A new report from the collaborative forum of African financial institutions the African Natural Capital Alliance (ANCA) and management consulting firm Oliver Wyman has underlined the growing importance of African regulators acting on nature-related risks in line with their mandate of maintaining financial stability.

The report “Improving the transparency of nature-related risks in Africa: the emerging regulatory agenda”, outlines how financial sector stakeholders, including regulators, are increasingly recognising that the depletion of nature poses risks to financial and economic stability.

The report makes clear that the issue is a particularly urgent one for sub-Saharan Africa as its economies are disproportionately dependent on nature. For instance, over 70% of people living in the region are dependent on forests and woodlands for their livelihoods, compared to about half of the total world’s GDP generated in industries that depend on nature. The rate at which nature in Africa is being lost also exceeds the global average. For example, Africa’s Biodiversity Intactness Index (BII) score – which measures the number and abundance of species on land – declined by 4.2% between 1970 and 2014, considerably higher than the global BII score decline of 2.7% over the same period.

In East Africa alone, failure to protect natural capital as a whole (including its stocks of soil, air, water, and all living things, which underpin the region’s economy and human well-being) would result in an economic loss of more than $11.3 billion a year, according to an assessment commissioned in 2021 by USAid.

Dorothy Maseke, the Nature Lead at FSD Africa and ANCA, says: “Enhanced transparency of nature-related risks is fundamental to managing them effectively. This is the case for individual financial institutions, which need visibility of the nature-related risks in their lending, underwriting, and investment portfolios. And it is also the case for regulators, so that they can identify nature-related risk concentrations for regulated entities and assess whether they are being managed effectively.”

African regulators embracing this complexity is so important, she adds, because the continent is disproportionately exposed to nature-related risks.

Sandra Villars, senior advisor at Oliver Wyman, says: “The Global Biodiversity Framework (GBF), which was adopted in December 2022 by 188 governments across the world, aims to address biodiversity loss, restore ecosystems, and protect indigenous rights. This landmark agreement prompts governments to introduce policies to manage nature loss, which will lead to regulators having to act, and highlights the opportunities for regulators to do so proactively.

African regulators could thus benefit from engaging with this new agenda early and being at the forefront of integrating nature into their regulatory regimes.”

As summarised in the report, there are four simple steps regulators can take as part of a nature-related disclosure roadmap while policy frameworks are being finalised in their jurisdictions:

  1. Engage with finance and environment ministries to align their regulatory approach with
  2. government’s policy agenda on nature
  3.  Assess internal capacity and act on gaps
  4.  Assess the capacity for action among regulated entities
  5.  Engage in voluntary nature networks such as the Sustainable Insurance Forum (SIF), the Network for Greening the Financial System (NGFS), the African Natural Capital Alliance (ANCA), and the Task Force on Nature-Related Financial Disclosures (TNFD)

Transform Health Fund raises $50m to scale proven innovative healthcare models in Africa

Posted on by TIMOTHYRADIER

7th June 2023, NAIROBI – FSD Africa Investments, AfricInvest, Malaria No More, and Health Finance Coalition (HFC) have announced the establishment of the Transform Health Fund (THF), a blended-finance fund for scaling proven and innovative healthcare models in Africa. THF has received commitments of $50 million reaching its target size for its first close.

The fund aims to respond to the critical healthcare financing gap in Africa while building a resilient healthcare ecosystem that improves access, affordability, resilience, and quality of healthcare for low-income patients. It will target three critical areas serving low-income patients: supply chain transformation, innovative care delivery, and digital innovation.

THF’s investments will target countries across sub-Saharan Africa, with a focus on East, Southern, and Francophone West Africa. This investment is designed to contribute to addressing the acute need for quality and affordable healthcare across the continent.

THF’s investment strategy explicitly targets health services for women as one of its main investment objectives. Some of its investments are constructed with a strong gender lens, targeting women-led businesses and serving increasing numbers of women.

Anne Marie Chidzero, Chief Investment Officer, FSD Africa Investments said: “FSDAi is excited to announce its catalytic capital investment in the innovative THF fund. We are proud that our capital contribution to this tranche of the fund facilitated the participation of other commercial and corporate private sector investors. Partnering with AfricInvest, HFC and the additional fund participants to strengthen the African healthcare system, particularly in a time of environmental stress and unpredictable climate events, is a high priority for FSDAi.”

Louise Walker, Head of Private Sector and Capital Markets Department, FCDO said: “The UK is excited with FSDAi to be a catalytic investor in the Transform Health Fund. This is an innovative partnership that brings together concessional and private finance which will in turn mobilise more capital, critical to making healthcare more accessible to and more affordable for low-income patients across the continent. I’m particularly pleased to see that investments will target women-led businesses and services will also focus on women, where we know maternal and infant mortality in Sub-Saharan Africa is well above SDG goals.”

AfricInvest, with its three decades of expertise and insight, will play a critical role in leveraging a wide range of support throughout many regions of the continent, providing financing for companies in the health sector, helping African local markets to both scale up their own healthcare systems as well as creating regional champions.

“As health financing needs continue to grow and healthcare demands increase, it is a critical we work toward closing Africa’s massive health financing gap,” said Martin Edlund, CEO, Malaria No More and Executive Director of the Health Finance Coalition. “The Transform Health Fund serves a vital role in catalyzing capital to scale healthcare solutions.”

THF’s partners include Royal Philips, Merck & Co., Inc., known as MSD outside of the United States and Canada, the U.S. International Development Finance Corporation (DFC), U.S. Agency for International Development (USAID), International Finance Corporation (IFC), Swedfund, FSD Africa Investments, Netri Foundation, Anesvad Foundation, Grand Challenges Canada (with funding from Global Affairs Canada), Chemonics International, and MCJ Amelior Foundation. The fund is expected to attract additional investors who share the goal of improving healthcare in Africa.