Country: Kenya

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.

African Development Bank approves $10 million investment in Dhamana Guarantee Company Limited, East Africa

Posted on by TIMOTHYRADIER

ABIDJAN, Côte d’ivoire, 21 November 2023 -/African Media Agency(AMA)/-The Board of Directors of the African Development Bank Group has approved a $10 million equity investment in Dhamana Guarantee Company Limited to support the use of capital markets as an alternative source of long-term funding for infrastructure and the real sector in East Africa.

Dhamana will be domiciled in Kenya as a limited liability company with a regional mandate to provide credit guarantees on debt capital market instruments. The Bank Group’s financing will enable Dhamana to issue guarantees for debt instruments. These local currency bonds are intended to boost the credit rating of the instruments to crowd in investment from pension funds, insurance companies and sovereign wealth funds to finance infrastructure and the real sector in East Africa.

The Bank, together with InfraCo Africa (part of the Private Infrastructure Development Group), Financial Sector Deepening Africa, and local institutional investors and other partners, will be supporting the operationalization of Dhamana.

Dhamana  will support access to financing for key sectors including transport, water, renewable energy, and waste management, among others. Dhamana is committed to catalyze financing to assist the scale-up of green and sustainable financing into East Africa. Its credit guarantee activities should provide investors with the necessary comfort to support the allocation and intermediation of pools of private institutional investors’ funding into infrastructure.”

Nnenna Nwabufo, African Development Bank Director General for the East Africa region, said, “The African Development Bank is pleased to continue to support the operationalization of innovative solutions such as those provided by Dhamana to unlock and channel long-term local currency funding towards the real sector.

PIDG’s CEO, Philippe Valahu, said, “African Development Bank joining PIDG marks a significant milestone for the Dhamana Guarantee Company. This additional equity will allow Dhamana to further mobilise significant untapped pools of domestic institutional capital into East Africa’s real economy, such as new green infrastructure, and providers of credit to individuals and businesses. We are committed to catalysing the development of domestic capital markets in Africa, as we seek to unlock investment for bankable, climate-resilient projects to be delivered with the scale and urgency required to meet the challenges of climate change and welcome the support of African Development Bank in Africa to help achieve this goal.

Ahmed Attout, African Development Bank Acting Director for Financial Sector Development, said: “The Bank’s support for Dhamana shows the catalytic role and potential of guarantee companies in leveraging opportunities for real sector and infrastructure financing in local currency and local corporate debt capital markets deepening in the East Africa region. The investment in Dhamana follows the Bank’s priority to mobilize institutional financing for infrastructure investment in East Africa.”

The Bank’s partnership with Dhamana advances several strategic objectives including to help stimulate local currency debt market financing across diverse infrastructure sectors and enhancing economic diversification and competitiveness in the region. The intervention also aligns with the Bank’s priorities to promote regional integration including through improved infrastructure development, promotion of inclusive and sustainable industrialization, and fostering innovation.

The investment aligns with African Development Bank strategic efforts, in collaboration with development partners, including PIDG, to operationalize credit enhancement companies in selected Regional Member Countries.

Distributed by African Media Agency (AMA) on behalf of African Development Bank.

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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.

Prudential pens commitment that ups its contribution to climate action

Posted on by TIMOTHYRADIER

Leading insurer Prudential plc has taken its climate action drive a notch higher by signing the Nairobi Declaration on Sustainable Insurance (NDSI). The NDSI is a collaborative effort by the insurance industry to provide broader solutions to the climate change challenge.

The signing of the declaration continues Prudential’s journey of confronting climate change. The insurer has in the past embraced various initiatives as it bids to cut its own carbon footprint while supporting its customers and nations to tackle climate change.

The Nairobi Declaration on Sustainable Insurance

Prudential signed the NDSI on September 5 at the FSD Africa and Private Infrastructure Development Group (PIDG) cocktail on the side-lines of the Africa Climate Summit 2023 in Nairobi. Prudential Africa Chief Executive Officer, Emmanuel Aryee Mokobi, accompanied by his Deputy Nick Holder; Marketing and Communications Advisor for Africa, Janice Kemoli; and Head of Enterprise Risk Management for Africa, Roelof Coertze, graced the occasion.

While commenting on this, Mr Mokobi emphasised the firm’s commitment to being a voice for a just and inclusive transition to clean energy in emerging markets in line with the companies ESG obligations

According to the UN Environment Programme’s Principles for Sustainable Insurance, the NDSI is “a declaration of commitment by African insurance industry leaders to support the achievement of the UN Sustainable Development Goals.”

UNEP describes the SDGs as “a shared vision to end poverty, rescue the planet, and build a prosperous and peaceful world”.

But, adds the UN agency in the NDSI introduction: “While progress is being made in many places, action to meet the SDGs is not yet advancing at the speed or scale required…”

This is where financial sector players such as Prudential, come in.

The NDSI document points out that, “as risk managers, insurers and investors, the African insurance industry has a key role to play in promoting economic, social and environmental sustainability—in other words, sustainable development.”

5 pillars

The NDSI is based on five pillars. These are: Risk Management; Insurance SDGs; Investment in a net-zero emissions economy; Policy, regulatory and industry engagement; and Promotion of the adoption and implementation of the four Principles for Sustainable Insurance across African insurance markets.

Mr Mokobi adds that Prudential will “collaborate within the working groups to ensure that together, we achieve the goals of NDSI and push our common agenda.” He notes that the NDSI builds on the work of the UN-convened Net-Zero Asset Owner Alliance (NZAOA), where Prudential has been a member of since 2021.

Net-zero by 2050

Prudential is committed to decarbonising its portfolio of assets to net-zero by 2050 and having carbon neutral operations by 2030. Its climate targets include decarbonising its operations and its investments, and engaging with its investees. Notably, 99 percent of the Group’s carbon footprint is from financed emissions.

Mr Mokobi explains that Prudential’s pursuit of its net zero target by 2050 adheres to a principle that the firm values. The insurer is keen to hit its set target while ensuring a just and inclusive transition in the markets it operates in, including emerging ones in Asia and Africa.

Prudential champions the acceleration of de-carbonisation in the emerging markets it operates in, highlighting that such markets may need different de-carbonisation pathways to developed markets. This is in line with its environmental, social and governance (ESG) obligations.

Mr Mokobi appreciates that the financial industry can play an important role in accelerating the energy transition. He says an enabling environment will be crucial in unlocking the insurance sector’s ability to mobilise transition finance.

Transition finance

For emerging markets, raising adequate transition finance is a big challenge – a major barrier to sustainable development for sectors and entire economies.

In 2019 and 2020, an estimated $11.4 billion was committed to climate adaptation finance in Africa. More than 97 percent of the funds came from public actors and less than three percent from private sectors. This is significantly less than the $52.7 billion annually to 2030, it is estimated African countries will need.

To bridge this gap, emerging markets have issued less than 10 percent of all sustainable debts, and majority of this 10 percent is coming from governments. Corporate organisations are not issuing sustainable debt yet.

To support this, Prudential issued a white paper with a threefold purpose. One is to define the case for a just and inclusive transition and its place in meeting the Paris Agreement. Secondly, it highlights the importance that Prudential places on ensuring the transition to a low-carbon economy is just and inclusive. Thirdly, it explores case studies and further actions required, both from Prudential and the wider market. Prudential believes that by using its influence to limit the impact of climate change, its policyholders will benefit, both through reduced impact on their daily lives, and through limiting financial impact on the portfolios it manages for them.

Stronger collaboration

Prudential believes a stronger collaboration between the public and private financial sectors is a crucial element to scale adaptation and resilience finance in Africa and globally. According to Unep’s Adaptation Gap Report 2022, titled Too Little, Too Slow, the estimated annual adaptation needs range from about $160 to $340 billion by 2030.

Making transition finance a reality requires the cooperation of many stakeholders: Regulators, energy firms, central banks, securities exchanges, corporates, and financial institutions, among others.

To add out voice to the importance of collaboration, Prudential Deputy CEO for Africa, Nick Holder, joined other panellists at the UN climate change high level champions dialogue to deliberate on how African insurers, banks, and investors, collaborate with the public sector to scale finance for adoption and resilience in the regions. Mr Holder stressed the need for integrating regulators in the formation of investment instruments, as this would facilitate the process and help in the development of pre-approved or easily accepted investment instrument. He also emphasised the need for Blended Finance with guarantees from Global institutions and Governments to make investment secure.

About Prudential plc

Prudential plc provides life and health insurance and asset management in 24 markets across Asia and Africa. The company’s mission is to be the most trusted partner and protector for this generation and generations to come, by providing simple and accessible financial and health solutions.

Prudential fully supports the just and inclusive transition to clean energy, and published a White Paper on this last year.

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MAURITIUS: $45 million in green bonds to finance 13 solar power plants

Posted on by TIMOTHYRADIER

Envolt, a subsidiary of the Mauritian conglomerate ENL, is launching a $45 million green bond programme in Mauritius. The aim is to finance the construction of 13 photovoltaic solar power plants in this island country off the coast of East Africa.

The green bond market is gathering pace in Mauritius. This is thanks to Envolt, a subsidiary of the Mauritian conglomerate ENL, which is launching a 2 billion Mauritian rupee ($45 million) programme. Envolt’s first green bond issue is for 510 million Mauritian rupees, or $11.5 million.

The programme is expected to run until 2028. The proceeds of the green bonds will be used to finance the construction and operation of 13 solar photovoltaic parks with a combined capacity of 14.4 MWp. The plants in Mauritius will be completed over a period of 10 to 17 months. According to the UK-based finance company FSD Africa, which is backing the deal, the issue represents an important milestone for the Mauritian renewable energy sector, as well as for the country’s capital markets, as it is the first green bond issue to finance clean energy in Mauritius.

In addition, “these green bonds will be the first of their kind issued in Mauritius under the 2021 Green Bond Principles (as devised by the International Capital Market Association [ICMA]), which are aligned with global standards and combat greenwashing by requiring rigorous assessment of projects and their respective environmental or emissions claims,” says FSD Africa.

The Envolt transaction is being advised by MCB Capital Markets, an investment bank based in Port Louis, Mauritius. It is part of the Southern African Development Community (SADC) Green Bond Programme supported by FSD, which runs until March 2024. Mauritius’ participation in this programme will accelerate the maturity and expansion of the Mauritian capital markets and advance the country’s efforts to attract private investment.

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Stove maker floats Sh1.5bn bond for Kenya, Nigeria upgrade

Posted on by TIMOTHYRADIER

Cooking stove manufacturer Burn has issued a $10 million (Sh1.5 billion) green bond whose proceeds will support clean energy projects in Kenya and Nigeria.

The company said the proceeds from the bond will allow it to increase its existing manufacturing capacity in Kenya as well as launch 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 (liquefied petroleum gas) stoves,” it said in a statement.

The funds from the green bond are poised to extend these benefits to an extra two 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 catalyse sustainable development” said Peter Scott, CEO and founder of Burn.

The US firm launched its first full manufacturing facility in Kenya in 2014. A brief on its website said that the solar-powered facility has a capacity of 250,000 stoves per month.

The bond issuance was supported by Dry Associated Limited, acting as the placement agent with FSD Africa, a specialist development agency funded by UK International Development, 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.

“We’re 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” Evans Osano, director of Capital Markets, FSD Africa, said.

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FSD Africa Investments (FSDAi) commits US$3 million to Carbon Value Exchange Ltd (Cavex), a pioneering digital platform linking buyers to small-scale carbon projects across Africa

Posted on by TIMOTHYRADIER

The latest investment represents a consolidation of FSD Africa’s early stage support to the project and makes FSDAi an early investor in an innovative digital market and payments platform set to revolutionise the voluntary carbon market.

30th October 2023, Nairobi – FSD Africa Investments (FSDAi) has invested US$3 million in Carbon Value Exchange (Cavex), a digital market and payments platform set to revolutionise the voluntary carbon market by allowing small producers of carbon credits such as farmers and small businesses to sell direct to corporate buyers. The platform aims to channel over US$500 million in carbon financing to small-scale green projects by 2030.

The Cavex platform uses cutting-edge technology to remotely capture real time data on the projects’ activities and calculate how much carbon is being displaced or removed as a result. This means buyers will have full transparency around the credits they are buying and can have confidence that the information they are being given is accurate.

The technology minimises the time and cost required for projects to validate and transact their carbon credits which until now has meant only larger renewable projects such as wind or solar farms, or businesses could afford to join schemes that allow them to trade carbon credits with buyers. Crucially, proceeds from the sale of carbon credits on Cavex will flow directly to the companies, people and communities running the projects using digital finance (e.g. mobile wallets), thereby increasing end to end transparency. By aiming to return 90% of transaction proceeds to project participants through digital finance, Cavex will play a pivotal role in amplifying small-scale, high-quality carbon projects and expanding market access for carbon offset projects across sub-Saharan Africa and eventually the Global South.

FSDAi’s investment is part of a seed funding raise of US$6 million by Cavex which will fund the next stage of its development to commercial viability. This includes early-stage convertible grant support from FSD Africa’s Digital Innovation team (amongst other co-grantors) for the platform’s core development by 4R Digital Ltd, the team which has incubated Cavex from concept to the current stage of investment. FSDAi’s investment in Cavex complements its existing portfolio that enables capital allocation to Africa’s green economic growth by backing existing asset managers and venture builders (examples include Africa Climate Ventures, Nithio, Persistent Energy, InfraCredit, Spark Energy and Catalyst Fund).

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 by UK International Development and works alongside FSD Africa, bringing different financing tools to play to incubate (FSD Africa) and pave the way for FSDAi early investment.

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.

Anne-Marie Chidzero, CIO, FSD Africa Investments, said: “Cavex is a marketplace platform that can radically expand the reach and impact of the voluntary carbon market across Africa through its use of digital technology and mobile money. This technology will allow rural and urban, micro to large businesses to sell their credits to large off-takers in the global North through the aggregation features of the exchange. This means that small and rural producers can participate and benefit from Africa’s great potential to be an exporter of carbon credits.’’

Nick Hughes, CEO and Co-Founder, Cavex, said: “This investment will help us prove how digital technology can open-up climate finance for many people, communities and projects that are displacing or removing carbon. Cavex has the potential to scale in the way mobile money scaled 15 years ago when Kenya and M-PESA spearheaded a global wave of digital finance. More widely, Africa has a huge role to play in the evolution of carbon markets and in this context, it is critical that we find ways to distribute climate finance more equitably and in a way that has real socio-economic impact.”

About Cavex

Cavex is a digital market and payments platform that connects buyers of carbon offsets to small-scale high-impact projects in the Global South. Cavex enables access to carbon financing for a wide range of small-scale projects with the objective of channelling over $500m to projects by 2030. The innovative approach drives efficiencies by utilising digital technologies and data capture to reduce the time and costs for projects to validate and transact their carbon credits. Cavex also utilises mobile money and innovative digital financial services to ensure that the majority of sales proceeds are channelled directly to projects and project participants.