Country: Nigeria

World’s Largest Cookstove Manufacturer To Open Nigerian Plant After Record Green Bond

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BURN Manufacturing, the world’s leading clean cookstove manufacturer and distributor, plans to open a new plant in Nigeria’s economic capital, Lagos, after issuing Sub-Saharan Africa’s first-ever green bond.

The Kenyan firm said Friday that proceeds of the $10 million bond will also allow it to increase existing manufacturing capacity in its home country.

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.

“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,” Peter Scott, CEO and Founder of BURN, said.

“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,” Scott said.

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.

“We are proud to have supported this landmark issuance, the first-ever green bond to finance clean cooking activities in sub-Saharan Africa,” Evans Osano, Director, Capital Markets, FSD Africa, said.

“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,” Osano said.

“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,” Osano added.

Sub-Saharan Africa urgently needs to mobilise $50 billion annually to address climate adaptation in agriculture, power and urban infrastructure, according to the UN Economic Commission for Africa and the International Monetary Fund (IMF).

Rising temperatures, sea levels, and worsening erratic rainfall are increasing the frequency and intensity of natural disasters and disrupting agricultural production, damaging infrastructure and threatening the sustainability of urban areas in the region.

The expected public financing available from national governments and international donors is however unlikely to be able to meet the financing needs of the region, underscoring the need to mobilise private capital.

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.

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.

Ikechukwu Iheagwam, Regional Director (East Africa) Agusto & Co. expressed delight for supporting 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,” Iheagwam said.

“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,” Iheagwam added.

According to Reuben Mabishi, head of research at Dry Associates Investment Bank, the company is proud to have been 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,” Mabishi said.

“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,” Mabishi added.

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For insurance industry, poor awareness slows growth

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The Nigeria’s insurance industry has recorded moderate growth in business expansion but still has low penetration when compared with other African countries, NIKE POPOOLA reports

As of the end of June 2023, the insurance industry’s total assets rose by 10.7 per cent to N2.7tn from 2.4tn reported in the corresponding period of 2022, according to the National Insurance Commission.

NAICOM’ statistics department revealed in its Bulletin for Q2, 2023, that the insurance industry’s balance sheet showed assets of non-life business was N1.63tn, while assets of life business stood at about N1.07tn.

The industry generate N551.4bn gross premium written in the first six months of 2023; It had generated N726.2bn gross premium written in the whole of 2022 financial period.

However, despite improvement in the industry’s businesses, the penetration was still below one per cent, according to industry figures.

On contribution to the larger economy, figures obtained from the Nigerian Bureau of Statistics reveal that the finance and insurance sector consists of the two subsectors, financial institutions, and insurance; the former accounted for 90.78 per cent and the latter, 9.22 per cent of the sector respectively in real terms in Q2, 2023.

As a whole, the sector grew at 28 per cent in nominal terms (year-on-year), with the growth rate of financial institutions at 30.41 per cent and 8.29 per cent growth rate recorded for insurance.

The sector’s contribution to the nominal GDP was 4.01 per cent in Q2, 2023, higher than the 3.63 per cent it represented a year previous, and lower than the contribution of 4.11 per cent it made in the preceding quarter.

The contribution of finance and insurance to real Gross Domestic Product totalled 5.26 per cent, higher than the contribution of 4.25 per cent recorded in the second quarter of 2022 by 1.01 per cent points, and lower than 5.35 per cent recorded in Q1, 2023 by 0.08 per cent points.

Perception

According to Mrs Augustina Steve of NAICOM, lack of trust and confidence in Nigerian insurance industry resulting from non-settlement of claims, constitute one of the biggest challenges of the industry.

“Non-settlement of claims has negatively impacted confidence in the industry,” she says.

In Nigeria, she notes, the problem of insurance industry is bad image.

This, according to her, for decades, perception stood as bane of the industry’s growth.

Steve says, “The bad image problem of the industry dates back to early 19th century when Nigerians took over insurance business from the early British managers.

“The way the then Nigerian managers carried out insurance business transactions especially in the area of claims payment made the public to see insurance as a scam.”

Ability to pay claims is the real test of a solvent insurance company, she notes.

She says that the quality of claims administration can make or mar an insurance company.

The NAICOM staff says, “Ideally, insurance business is all about claims payment, since claim is the main reason a policyholder takes up an insurance policy.

“Without claims being paid by insurance companies, people are not likely to take up insurance policies, and insurance company will not maximise profits, thus claims payment in insurance contract serves as spice that attracts potential policyholders to insurance patronage.”

She observers that experience has shown that some policyholders are dissatisfied with how they are treated by the insurers when loss occurs.

Some of the complaints by claimants about insurance claims management, she notes, are insurance companies’ request for too much evidence and documentations to prove a loss; some claims are not settled because the insurer refuses to admit liability; when claims are settled, they are not paid in full.

Other complaints, she says include that some claims are rejected on purely technical grounds; claims are generally unduly delayed; the insurer argues that the claims are fraudulent, among others.

Challenges

According to the President/ Chairman Of Council, Lagos Chamber Of Commerce & Industry, Dr. Michael Olawale-Cole, the insurance industry has experienced minimal growth in real terms over the years due to various challenges faced by stakeholders.

“These challenges include limited awareness among the general population regarding the significance of insurance, low purchasing power, disruption from technology, unfavourable economic conditions, apathy toward filing claims for damages, and diverse religious and cultural sentiments, among other factors,” he says.

The Nigerian insurance industry, despite its enormous potential, he observes, is still at the infant stage and far behind its African peers judging by key indicators.

According to the global insurance market report, he says, the insurance penetration rate for Nigeria and South Africa is 0.5 and 12.2, respectively. While other leading emerging economies, kenya (2.9) and ghana (1.2) have low insurance penetration rates, Nigeria has the lowest figure comparatively, despite being the largest economy in Africa, he says.

Undoubtedly, the LCCI boss says, the insurance sector has potential for development due to various alterations in the regulatory framework, necessitating future modifications in the operational practices.

He says, “It has the potential to achieve enhanced success in the aftermath of the pandemic via the adoption of novel strategic approaches by its stakeholders aimed at growing the sector.

“The future of the insurance business hinges on the extent and speed of digital transformation since it has the potential to enable industry participants to secure a significant market share. Digitalisation will provide a streamlined and efficient experience for clients entering the insurance sector.”

Awareness

The President, Chartered Insurance Institute of Nigeria, Mr Edwin Igbiti, says insurance plays a pivotal role in safeguarding the financial well-being of individuals, businesses, and even governments.

It serves as a safety net in times of unexpected circumstances or unforeseen events, he says.

Igbiti says, “Our aim as insurance practitioners is to educate and provide peace of mind to our clients, ensuring that they are adequately covered and prepared for any risk that may arise.

“We face certain challenges that hinder the growth and effectiveness of the insurance industry in our community. Lack of awareness about the benefits of insurance and its role in economic development is prevalent among our people.”

The CIIN boss seeks the support of the government and other organisations in creating awareness campaigns to educate the public and promote a culture of insurance, emphasising its importance in mitigating risk and protecting their assets.

“We request assistance in advocating for policies and regulations that promote transparency, fairness, and sustainability within the insurance sector,” he says

Service delivery

Head SERVICOM, Adeyemi Abubakar, attributes poor insurance penetration in Nigeria to the peculiar market environment, limited public awareness and negative public perception by those who are aware of insurance.

“But in the reality, inadequate service delivery is a major challenge to why insurance acceptance has been very low,” he says.

According to him, building confidence and promoting public understanding on the insurance mechanism, effective consumer protection and education will build consumer trust and confidence, consumer trust builds the insurance market through insurance premium volume.

He says that insurance market growth generates savings, investment and employment.

Insuretech

Mr Ibrahim Ngaski of Information Technology Department, NAICOM, says digital technology has taken the world by storm affecting, changing and improving the way things are done.

The insurance industry, he notes, is currently lagging behind and needs to reassess its business model, re-evaluate its strategy and make the digital agenda a high priority.

It is time for insurers to evolve and respond to these changes in order to meet up with customers’ expectations; and that requires a different set of skills, culture and operating model, he notes.

He explains that, “The term ‘Insurtech’ is coined from the combination of two words ‘Insurance’ and ‘technology’.

“Insurtech is the use of technological innovations designed to make the current insurance model more efficient. People in modern society want to be able to buy travel insurance, life insurance, health insurance, property insurance, and other products with the tap of a finger on their devices, rather than having to sift through stacks of forms.

“Insurtech start-ups are aware of this and have developed a method, for people to obtain easily accessible and ultra-customised insurance policies.”

NAICOM, he says, recently partnered with FSD Africa 2022 to launch the BimaLab Insurtech initiative in Nigeria, which will enable the implementation of ideas for improving insurance in the country.

He says, “BimaLab Nigeria aims to close insurance market gaps by educating, nurturing, and promoting innovations and Insurtech start-ups.

“The innovators were selected to participate in the 10-week programme that provide them with the expertise, resources and support to develop and scale market-ready solutions that bring social and or commercial value to Nigeria’s Insurance sector by bringing creative ideas to the table.”

According to him, insurance companies can maintain a competitive edge by automating, improving and optimising their business processes without compromising efficiency, quality, and response time.

This will enhance employee productivity, speed-up processes, raise customer service levels, improve customer experiences, reduce operational expenses and increase operational efficiency, he says.

He adds that there is an urgent need for the insurance industry to adopt technologies to provide digital solutions.

When this is done, he says, it will improve access to insurance by providing digital channels of distribution, enhancing easier access to insurance products and coverage, speedy issuance of coverage and claims payment and provides Innovative products to their customers.

Growth initiatives

The Commissioner for Insurance, NAICOM, Sunday Thomas, says, the commission has shown a positive attitude to market development by the release of the Soundbox guidelines which is an instrument to test ingenuities in the market.

He says the commission seeks to facilitate and promote innovative insurance solutions that will address the gaps in current insurance offerings.

He adds that, “there is the urge to intensify the ongoing drive to facilitate platforms that address the demand-supply gap; encourage specialised products that addresses the needs of the oil and gas industry; Address all potential regulatory impediments; support the development of human capacity and ensure technical capacities of insurance suppliers; ensure adequate risk pricing and comprehensive coverages and risk management

“As the regulator, we are committed to creating an enabling environment that will consistently enhance increased capacity of the Insurance Institutions both financially and technically.”

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African alliance targets financial instrument for mangroves

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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

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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.”

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

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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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Project accelerator launches to drive investments in African biodiversity

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A group of five companies and organisations has launched an accelerator to attract investment in high-quality biodiversity projects across Africa, with a first call for proposals open until late next month.

Biodiversity Investments – Researcher & Accelerator (BIRA) will be hosted by the African Leadership University School of Wildlife Conservation and co-funded by global entrepreneur firm Dalberg and FSD Africa Investments, with contributions from biodiversity specialist firms CreditNature and Xilva.

The initiative will work to develop ecosystem measurement frameworks suited to the African reality, including user-friendly investor metrics, as well as offer grants to organisations that provide comprehensive assessments and monitoring systems to understand the environmental impact of pipeline companies, according to Dalberg’s website.

“Further, BIRA will engage investors through the grant which will be used to co-develop financing propositions and facilitate investment memoranda and marketing to promote credits,” it said.

“Through such a structured approach, the funding can prepare project developers to be investor ready whilst developing a pipeline of biodiversity deals in Africa and attract investors to the sector.”

In a comment on LinkedIn, CreditNature CEO and founder Cain Blythe said BIRA has been designed to “develop a credible approach to accelerating biodiversity and ecosystem measurements as a core offering for investable nature-based solution projects in Africa”.

One of CreditNature’s contributions to BIRA will be to apply its Natural Asset Recovery Investment Analytics (NARIA) framework.

“We’re offering African projects a high integrity, science-based, and scalable approach to measuring ecosystem integrity,” said Blythe.

“For projects in Africa, this means setting robust ecosystem baselines and forecasting unique recovery and rewilding strategies, all while preparing for potential investors.”

BIRA will be accepting applications for its first round of grants until Oct. 20, without specifying the amount available.

“Applicants must have biodiversity projects in Africa, have completed a business plan or feasibility study, and look to attract investors/buyers,” Dalberg said.

“BIRA will support select projects in conducting assessments of their biodiversity impact and investor readiness, and it will help showcase investor-ready projects to potential funders.”

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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.