Country: Ethiopia

Right Honourable Andrew Mitchell MP joins stakeholders at COP28 to celebrate progress on the newly incorporated Dhamana Guarantee Company

Posted on by TIMOTHYRADIER

5th December 2023

Dubai, United Arab Emirates: On the dedicated Finance Day of COP28, the Right Honourable Andrew Mitchell MP, Minister of State of the United Kingdom for Development and Africa, joined Kenyan government and stakeholder representatives in the UK Pavilion to celebrate progress on the newly incorporated Dhamana Guarantee Company Limited (Dhamana). The new guarantee company has been created to unlock local capital for sustainable infrastructure and projects that will advance climate change mitigation and adaptation efforts across East Africa.

Dhamana was established in Nairobi, Kenya, by InfraCo Africa, part of the Private Infrastructure Development Group (PIDG), and Cardano Development with support from FSD Africa. The company draws on the success of other PIDG-supported credit enhancement facilities, InfraCredit Nigeria and InfraZamin Pakistan, and recently received significant funding commitments from the African Development Bank (AfDB) and CPF Financial Services (CPF), who were represented alongside PIDG at the meeting with Mr Mitchell in Dubai.

Mr Mitchell said, “As our recent white paper set out, the UK is committed to supporting countries that want to draw on their own resources to tackle climate change. This investment will provide the guarantees needed to enable Kenyan pension funds to fund climate resilient infrastructure in Kenya. It is fantastic to see that PIDG, Cardano Development and FSD Africa are collaborating with the Africa Development Bank and a Kenyan pension fund to deliver this new approach and demonstrate how African resources can be used to fund African development.”

Dhamana’s initial focus of operations will be in Kenya, a country which holds significant wealth in pension,i life insurance and private wealth funds. However, in Kenya, as for much of East Africa, cash- flow based investments and infrastructure projects are largely reliant on US dollar denominated bank loans. Such loans seldom have sufficient tenor length to ensure project success, and can expose borrowers to currency exchange risk, challenges which Dhamana’s local currency guarantees will serve to mitigate.

Dhamana CEO, Christopher Olobo, said, “The focus of COP28 is around the need to unite, act and deliver for climate action. Dhamana epitomises this ethos by bringing partners together to facilitate a step-change in how we finance East Africa’s development, accelerate access to climate-resilient infrastructure and achieve the UN SDGs. With the backing of our shareholders, Dhamana will strengthen local capital markets, connecting bankable projects with untapped pools of domestic institutional capital and ensuring that investors have the comfort they need to use their funds for positive change.”

InfraCo Africa’s CEO, Gilles Vaes, said, “We are extremely proud of the work undertaken by all parties to establish Dhamana, and to attract significant funding commitments which will enable it to deliver on its vision.” Emphasising the significance of Dhamana for climate action, PIDG CEO, Philippe Valahu, said, “As part of the wider PIDG suite of credit enhancement facilities, Dhamana’s local currency guarantees will support the growth of local capital markets, unlocking domestic capital to underpin a thriving ecosystem for climate-resilient infrastructure and project development across East Africa.”

Joost Zuidberg, CEO Cardano Development enthusiastically stated, “The power of Dhamana lies in its ability to catalyse substantial investments from East Africa’s institutional capital, fortifying the bedrock for the sustained financing of the region’s burgeoning economic landscape. At the heart of Cardano Development lies our incubation and management of guarantee solutions for emerging and frontier markets, we are delighted to work alongside AfDB, County Pension Fund, InfraCo Africa, PIDG and FSDA on this innovation and together empower Dhamana with the essential support and capital required to realise this pivotal mission.”

Mark Napier, CEO FSD Africa said, “FSD Africa is committed to supporting local currency bond markets in Africa as well as local currency credit enhancement facilities as they play an important de-risking role. This role is pivotal in the mobilisation of climate finance from both local and international owners of capital to African economies that require different sources of capital to fund their green growth. FSD Africa is particularly pleased to provide seed funding for Dhamana Guarantee Company Limited’s Technical Assistance Facility which will provide project preparation and transaction support to potential issuers of innovative climate financing debt instruments, thereby increasing the pool of bankable climate-resilient projects in East Africa.”

Following the recent announcement of the African Development Bank’s Board approval for a US$10m equity investment into Dhamana, AfDB Vice President for Private Sector,

Solomon Quaynor, said, “Dhamana’s credit enhancement offering aligns well with several of AfDB’s strategic objectives, including our commitment to stimulating local currency debt markets as a route to unlocking new sources of green and sustainable finance for the real sector and infrastructure development across East Africa.”

Dr. Hosea Kili, CEO of CPF concluded, saying, “CPF Financial Services is excited to be part of the investors in Dhamana, a new guarantee company to serve the East African region. Dhamana is envisioned to unlock local currency debt from untapped pools of capital in Kenya and the East Africa region, providing guarantees for local currency bonds invested in by East African pension funds, insurers, and other financial institutions. This guarantee fund will enable infrastructure and other sectors to raise more money locally in KES, without the borrowers suffering from KES-to-USD devaluation.”

 

Dhamana Guarantee Company (Dhamana):

Dhamana is working to catalyse the development of domestic capital markets in East Africa. It does this by connecting significant untapped pools of domestic institutional capital with the real economy, such as new green infrastructure, and providers of credit to individuals and businesses. This increases access and the affordability of local capital, providing new low-risk opportunities for local investors. Dhamana will also serve to provide a portfolio of businesses with access to the local currency capital needed to deliver bankable projects, meeting the high demand for new affordable housing, transportation, water, and energy infrastructure, and promoting long term economic development. www.dhamana.com

The Private Infrastructure Development Group (PIDG)

PIDG is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity, and impact. Since 2002, PIDG has supported 211 infrastructure projects to financial close which provided an estimated 222 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany and the IFC. www.pidg.org

InfraCo Africa:

InfraCo Africa is part of the Private Infrastructure Development Group (PIDG) and seeks to alleviate poverty by mobilising investment into sub-Saharan infrastructure projects. It does this by investing directly into early-stage projects and by providing project development leadership. Through its investments arm, InfraCo Africa can also provide equity to close a financing gap and start construction or fund innovative solutions that need support to scale-up, to pilot new products or enter new markets. InfraCo Africa is funded by the governments of the United Kingdom (through FCDO), the Netherlands (through DGIS) and Switzerland (through SECO). www.infracoafrica.com

Cardano Development:

Cardano Development (CD) is an incubator and fund manager, established in 2007. Through careful risk-management analysis in data poor settings, CD identifies scalable solutions that can help to make frontier financial markets more inclusive, investible, and sustainable to unlock lasting economic value. CD creates scalable solutions for currency, credit, and liquidity risks in these markets. With over USD 6 billion assets and USD 2.5 billion capital under management, CD supports eight scale-up funds: TCX, GuarantCo, Frontclear, BIX Capital, ILX Fund, IMFact, AGRI3 Fund and Nyala Venture. As well as six start-ups: NASASA CD, Octobre, Social Infra Ventures, The Development Guarantee Group, The Green Guarantee Company and new guarantee company with ongoing management services and corporate governance oversight. www.cardanodevelopment.com.

FSD Africa:

FSD Africa is a specialist development agency working to help make finance work for Africa’s future. Based in Nairobi, FSD Africa’s team of financial sector experts work alongside governments, business leaders, regulators, and policymakers to design and build ambitious programmes that make financial markets work better for everyone. Established in 2012, FSD Africa is incorporated as a non-profit company limited by guarantee in Kenya. It is funded by UK aid from the UK government. www.fsdafrica.org

 

African Development Bank (AfDB):

The AfDB Group is a regional multilateral development finance institution established to contribute to the economic development and social progress of African countries that are the institution’s Regional Member Countries (RMCs). The AfDB was founded following an agreement signed by member states on August 14, 1963, in Khartoum, Sudan, which became effective on September 10, 1964. The AfDB comprises three entities: the African Development Bank (ADB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). As the premier development finance institution on the continent, the AfDB’s mission is to help reduce poverty, improve living conditions for Africans and mobilise resources for the continent’s economic and social development. www.afdb.org

CPF Financial Services (Kenya):

CPF is a leading financial institution with its core in Pensions Management, boasting a substantial fund value of USD 1.06 billion in Assets Under Management. The institution has a strategic footprint extending across East Africa, providing a wide range of services, including Fund Administration, Trust Fund Services, Digitization, Archival Services, Training and Management Consulting. The CPF Group has subsidiary companies across various sectors including Laser Infrastructure & Technology Solutions (LITES), Laser Property Services, Laser Insurance Brokers (LIB), CPF Asset Managers and Rukisha Advances Solutions (a cutting- edge payments platform). www.cpf.or.ke

AfricInvest and Africa50 provide $20 Million in financing to Africa Healthcare Network (AHN) for a continent-wide expansion.

Posted on by TIMOTHYRADIER

Nairobi, Kenya, November 22, 2023 – Africa Healthcare Network (AHN), a leading provider of dialysis services in Africa, has secured $20 million in equity and debt funding, from Africa50 and AfricInvest, two leading African institutions, and Tokyo-based Ohara Pharmaceutical Co., Ltd.

The funding will enable AHN to accelerate its growth and address significant gaps in the availability of high quality, affordable renal care across Africa.

Africa50, which led the equity funding, invests in high-impact, high-growth businesses and projects across the continent. AfricInvest, which provided debt financing through its Transform Health Fund (THF), is a leading pan-African investment platform, dedicated to supporting businesses that drive economic growth and social development. THF is an innovative blended-finance fund that invests in locally-led health supply chain, care delivery, and digital solutions in Africa. Under the leadership of AfricInvest, along with the Health Finance Coalition, a group of leading global health funders hosted by Malaria No More, the fund finances enterprises that improve health system resilience and pandemic preparedness across the continent.

The investment will enable AHN to:

  • Expand Access to Care: AHN has 45 clinics today and plans to continue growing rapidly, entering underserved regions to expand access to life-saving treatment.
  • Enhance Technology and Disease Prevention: The funding will also accelerate AHN’s technological capabilities, including early identification and management of kidney disease.
  • Strengthen its Healthcare Workforce: AHN will further invest in training and development programs for its 500+ employees, continuing to elevate the standard of care.
  • Maximize Development Impact and Sustainability: Adhering to the highest ethical and ESG standards, AHN aspires to be a role model in healthcare and a force for good in its local communities.

Matt Williams, CEO of AHN, expressed his excitement, stating, “With the support of Africa50 and AfricInvest, we are well-positioned to make a dramatic impact in the fight against kidney disease and improve the overall healthcare landscape in Africa.”

Raza Hasnani, Managing Director and Head of Infrastructure Investments at Africa50, remarked, “We are excited to be partnering with AHN to further their mission of improving access to quality kidney care across Africa. The AHN team has already achieved significant milestones, and we look forward to being part of the journey to impact more lives. This partnership is aligned with Africa50’s strategic focus on healthcare, a sector which can deliver both positive impact and attractive investment returns.”

Faisal Jiwa, Co-Lead of AfricInvest’s Transform Health Fund, added, “We are proud to be partnering with the entire team at AHN in its mission to improve access to quality, affordable healthcare services in Africa, which is fully aligned with THF’s impact-first strategic focus along the healthcare value chain. We believe AHN is uniquely positioned to build the healthcare ecosystem across the continent, led by a strong culture of impact and operational excellence.”

Nikhil Pereira-Kamath, Executive Chairman and Co-Founder of AHN, reiterated the power of the partnership, “We’ve seen tremendous growth in recent years, growing from 17 centers at the end of 2021 to nearly 50 centers and over 500 team members by year end 2023. With an acute focus on high quality patient care, we look forward to Africa50 and AfricInvest supporting our rapid expansion across the continent with the ambitious goal of achieving 100+ centers by 2025, and further growth beyond.”

The collaboration between AHN, Africa50, and AfricInvest underscores the importance of high-impact partnerships in addressing pressing healthcare challenges in Africa. As part of the transaction, AHN received support on completion deliverables related to the transaction from CrossBoundary, an advisory group focused on unlocking private capital in underserved markets.

About Africa Healthcare Network (AHN):AHN is a leading dialysis services provider in Africa, dedicated to improving access to quality healthcare for patients with kidney disease. AHN operates a network of dialysis centers across the continent, offering world-class treatment, state-of-the-art facilities, and a compassionate approach to patient care. For more information, visit: www.africahealthcarenetwork.com

About Africa50:Africa50 is an infrastructure investment platform that contributes to Africa’s growth by developing and investing in bankable projects, catalyzing public sector capital, and mobilizing private sector funding, with differentiated financial returns and impact. Africa50 currently has 33 shareholders, comprised of 30 African countries (including the governments of Tanzania, Kenya, and Rwanda – all countries of operation for AHN), the African Development Bank, the Central Bank of West African States (BCEAO), and Bank Al-Maghrib. For more information, visit: www.africa50.com About AfricInvest:AfricInvest is a leading pan-African investment platform active in multiple alternative asset classes including private equity, venture capital, private credit, and listed equities. Over the past quarter century, we have raised more than $2bn to finance almost 200 companies at various development stages, delivering value and impact for our investors, portfolio companies, and the communities we serve. Our 100-strong team of investment experts in more than ten offices across three continents has a proven track record of providing attractive risk-adjusted returns while spurring productivity growth, creating jobs, and ultimately improving African lives through inclusive and sustainable development. For more information, visit: www.africinvest.com About Ohara Pharmaceutical Co., Ltd.:Ohara Pharmaceutical Co., Ltd is a pharmaceutical company with major business of orphan drug discovery and generic drug development and manufacturing. In particular, Ohara focuses on the orphan drugs in the field of childhood cancer and high quality accident-preventive generic drugs. Under the current rapidly changing environment where medical treatments and techniques are dramatically improving, we are pursuing providing total healthcare solutions with prevention, diagnosis and aftercare to enhance the quality of patient’s life. We are promoting to develop total healthcare programs in Asia and Africa in alliance with global innovators. For more information visit: www.ohara-ch.co.jp/english/  For media inquiries, please contact: Africa Healthcare Network: Saksham Bhandari, Chief of Staff, Tel: +254 700 420 113, saksham.bhandari@africahealthcarenetwork.com

Africa50: Nana Boakye-Yiadom, Senior Communications Coordinator, Tel: +212 666166308, n.boakyeyiadom@africa50.com

AfricInvest: Ann Wyman, Senior Partner, Tel: +216 71 189 800, ann.wyman@africinvest.com and Jordan Filko, Investment Manager, Tel: +254 725 705 773, jordan.filko@africinvest.com

Pension funds have the potential to ignite Africa’s infrastructure revolution

Posted on by Kihingu Inc

Across Africa, economic growth and development have gained significant momentum in recent years. But with growth comes a challenge: building and funding the infrastructure to support it.

Where will the funding for Africa’s new infrastructure come from? This remains a crucial question. One solution that offers great potential is pension funds: a vast pool of long-term capital that could be channelled towards infrastructure, with a focus on climate change adaptation.

The importance of infrastructure

Infrastructure is the backbone of any thriving society, enabling connectivity and access to services. In Africa, better infrastructure is pivotal to progress – building bridges that connect communities, power plants that illuminate cities, schools that nurture young minds and hospitals that save lives. But the scale of infrastructure development required across the continent is substantial. And this means a significant amount of funding is needed.

Harnessing pension funds

African pension funds have grown rapidly in recent years, accumulating substantial capital. Instead of letting this money sit idle, pension funds could invest a portion of it in infrastructure projects.

With their long-term outlook and stable cash flows, pension funds are well suited for investing in projects that require longer periods of time and large amounts of resources – as many infrastructure projects do.

Win-win scenario

When pension funds invest in infrastructure, it creates a win-win situation. Infrastructure investment entails improved transport, better energy access and upgraded healthcare facilities, which all contribute to economic growth and enhanced quality of life for people in the region.

In addition, infrastructure projects generate long-term revenue streams, like toll fees from highways or electricity sales from power plants, providing pension funds with steady cash flows, and supporting future retirement payments.

Nigeria and South Africa

 Several African countries have already begun to recognise the value of investing pension fund assets in infrastructure:

  • Nigeria: The Nigerian Sovereign Investment Authority has used pension assets to finance key infrastructure projects, including roads, power generation and healthcare facilities. These investments have greatly improved connectivity and quality of life for many Nigerians.
  • South Africa: The Public Investment Corporation has been vital in financing infrastructure projects, including renewable energy initiatives. These investments are contributing to South Africa’s sustainability goals and fostering a greener future.

Covid recovery and sustainable investment

 The Covid-19 pandemic has severely impacted Africa’s economy, but the recovery effort has provided an opportunity to prioritise sustainable infrastructure investments. By allocating a portion of their portfolios to infrastructure projects, pension funds can help drive economic recovery while ensuring long-term returns. In Ghana, for example, the Social Security and National Insurance Trust has been actively investing in infrastructure projects to support the country’s recovery efforts.

Climate change resilience

Africa is particularly vulnerable to the effects of climate change. This is an important consideration when financing new infrastructure. Pension funds can help the continent build a climate-resilient future by prioritising investments in renewable energy, climate-smart agriculture and resilient urban planning. In Kenya, for example, the government has invested in a number of renewable energy projects, like geothermal power plants. This not only helps to fight climate change, but also provides sustainable energy solutions for the country.

Building a sustainable future

African governments, supported by international organisations like the World Bank and the African Development Bank (AfDB), have already implemented recovery plans that emphasise infrastructure as a key strategy to stimulate growth and improve the lives of ordinary Africans. Continuing this momentum and recognising the potential of pension funds to finance infrastructure, will be essential for Africa’s financial development.

As African nations continue to grow and evolve, the deployment of pension funds in infrastructure projects stands as a beacon of sustainable development. These investments will do more than build roads, power plants, and hospitals; they will weave a fabric of connectivity, opportunity, and stability that will endure for centuries.

FSD Africa Impact Report – 2023

FSD Africa’s 2023 Development Impact Report discusses our progress against our sustainable finance strategy and is the second since we began implementing the strategy in April 2021. Other than progress, we also share the lessons we have been learning along the way on how to make finance work harder for Africa, both for current and for future generations.

In 2023, we celebrated two key milestones – the 10th anniversary of FSD Africa, and the coming of age of FSD Africa Investments. FSD Africa Investments turned six this year and has so far committed £92m pounds. Together, FSD Africa and FSDAi, have delivered value to over 12 million people and 3.2 million businesses, and have helped strengthen the financial markets in over 30 African countries.

While we celebrate several milestones, we are cognisant of the challenges that African countries continue to face in mobilising sufficient finance for climate and social development goals. That is why we are now placing a greater emphasis on new ways of mobilising finance for the continent’s sustainable development – through innovative climate finance solutions, leveraging Africa’s natural capital, and developing carbon markets. We emphasise the unique opportunities and resources that Africa has, and can bring to bear, in solving the climate and development challenge we all face.

What to expect from the report.

  1. Learn about our work with regulators, policy makers and other market actors and how this is helping to catalyse the flow of finance into frontier investment opportunities on the continent.
  2. Learn about the Africa Natural Capital Alliance, which we helped set up to mobilise the financial community’s response to nature loss in Africa and to help drive nature-positive investments on the continent.
  3. Learn about the work we are doing with 4R Digital, Rabobank and others to grow and democratise access to Africa’s carbon markets. iv. Learn about our investment in Catalyst Fund, and how support provided to Sand to Green, an Africa based Agri start-up, is promoting sustainable food production in Northern Africa.
  4. Learn about the Bima Lab Insurtech Accelerator, and the work we are doing with Soso Care in Nigeria, a low-cost health insurance provider that accepts recyclable waste as payment for insurance cover.
  5. Learn about our emerging work on gender that is focused on giving women agency and financial resources that help advance the continent’s climate action, as well as solving for other needs.
  6. Learn about the many other transactions we have supported to bring renewable energy, clean transport, and affordable green housing to those who need them most.
  7. Lastly, engage with the lessons and insights we share from our experience, and let us know your thoughts on how we can make finance work better for Africa’s future.

African alliance targets financial instrument for mangroves

Posted on by TIMOTHYRADIER

Financial instruments supporting mangroves and forestry are under consideration by members of the African Natural Capital Allliance (ANCA), an executive at the organisation has said.

ANCA is in conversation with financial institutions looking to create innovative instruments that support mangroves and forests, according to Dorothy Maseke, head of ANCA’s secretariat.

“ANCA and FSD Africa are looking towards supporting a number of specialised financial instruments in mangroves and forestry,” Maseke told Carbon Pulse.

These could combine elements of bonds, guarantees, and insurance, she said. Established in 2022 by non-profit FSD Africa, ANCA is an African-led initiative whose members – including the likes of Standard Chartered, KCB, and Equity Bank – together manage assets of $390 billion.

Conservation bonds could be a key area of expansion for ANCA members, Maseke said.

“The discussions on opportunities are real. We are doing a lot in terms of connecting our partners, to support them on this journey, because many are interested. They just don’t know where to start,” Maseke said.

Regulation needs to change to support conservation-related bonds as “capital market structures in Africa do not necessarily support them,” she said.

“When the regulator supports capital market structures that will support this kind of investment, then it gives financial institutions, investors, and private equity the confidence to put their money on the table,” she said.

“It also enables fund managers or advisory firms to actually develop these bonds. Those are some of the things that ANCA will be pushing for.”

The only conservation-related bond on the continent to have been issued so far was the World Bank’s ‘rhino bond’, a $150 million issuance in 2022 in support of black rhinos in South Africa.

AFRICAN BIODIVERSITY CREDITS?

Development agencies and small project owners are driving discussion on the topic of biodiversity credits in Africa, another novel way of financing nature, Maseke said.

“Those developers who for years have been working on small projects, now all of a sudden are starting to pay attention,” she said.

“You may find some financial institutions who decide to develop the [biodiversity] credits market. Some may want to put up a biodiversity credits exchange.”

When governments drawing up nature strategies turn to private financing, they will eventually begin to work with these smaller actors on biodiversity credits, she predicted. “At some point, they’re going to converge. In some countries, they’re already converging.”

“Strong discussions” about biodiversity credits from market actors in countries including Rwanda, Ghana, Kenya, and nations around the Congo Basin are underway, she said.

“Kenya wants to go into the green economy and the bioeconomy is a key part of that. There’s a whole discussion of bioeconomies from biodiversity-rich African nations. Building a bioeconomy is the next frontier.”

However, lessons on biodiversity credits have been learned from the carbon credits market, she said. “It’s still a developing concept. It’s also coming on the backdrop of very negative press from the carbon credit side.”

“There’s still a lot of research that needs to be done in terms of, is the African market ready to go fully into it? That needs to be done fast.”

One advantage a voluntary biodiversity credits market would have over its carbon equivalent is that the former already has Indigenous Peoples and local communities at the centre, she said.

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

Posted on by TIMOTHYRADIER
  • 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

Posted on by TIMOTHYRADIER

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.”

Africa Blue Wave, a $1 million initiative, launched to support African tech startups

Posted on by TIMOTHYRADIER

BFA Global, FSD Africa, and the International Union for Conservation of Nature (IUCN) have launched the Africa Blue Wave, a $1 million initiative to support tech startups.

The targeted startups will contribute to more sustainable livelihoods and use of ocean and water resources. This initiative, made possible through funding from FSD Africa and the Canadian Government, builds on TECA’s (Triggering Exponential Climate Action) expertise in fostering blue innovation over the last year through a successful pilot wave supported by FSD Africa.

The Africa Blue Wave will support high-potential individuals who demonstrate a passion for addressing climate issues in Africa’s blue economy. It will be implemented by TECA, an initiative of BFA Global, with support from OceanHub Africa.

The wave will recruit 40 innovators from Kenya, Tanzania, Comoros, Madagascar, and Mozambique. Selected participants will receive support in the form of mentorship, guidance from industry experts, networking opportunities, and initial capital investment. This can help them build and bring their climate and ocean solutions to market. At the end of the wave, participants will have the opportunity to showcase their solutions and pitch their businesses to investors, potential partners, and industry leaders to secure additional support and investment.

“As we embark on the Africa Blue Wave, we carry with us the invaluable lessons learned from our inaugural wave. These insights will be the cornerstone of our commitment to making this new wave bigger, better, and more impactful than ever before. We’ve demonstrated that solutions can be homegrown by local talent, and I am excited to work with innovators to create more solutions that contribute meaningfully to local and global climate challenges.” Shirley Mburu, TECA Program Director, BFA Global

“The initiative aims to invest in Africa’s young innovators to catalyse solutions to address ocean challenges and achieve sustained ocean health across five priority seascape areas in Comoros, Kenya, Madagascar, Mozambique and Tanzania. Our long term goal, as envisaged in the Great Blue Wall initiative, is to transform coastal economies into drivers of positive conservation and socioeconomic development. We commend and greatly support Africa’s leadership and efforts in accelerating the development of a regenerative blue economy on the continent,” Thomas Sberna, Regional Head, Coastal and Ocean Resilience, IUCN Eastern and Southern Africa.

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