Pillar: FSD Africa Investments

FSD Africa Investments announces first investment in Nature-Based Solutions with US$2.5m commitment to West Africa Blue

Posted on by Allan Musumba

Nairobi, July 2, 2025: FSD Africa Investments (FSDAi), the UK-backed specialist development finance investor, is investing US$2.5 million into West Africa Blue (“Blue”)’s blue carbon project in Sierra Leone’s Sherbro River Estuary (SRE). The investment was announced by the UK Foreign Secretary, the Rt Hon. David Lammy MP, at the Africa Debate in London on Wednesday 2 July 2025. FSDAi’s investment will contribute to the conservation and restoration of approximately 94,000 hectares of mangrove ecosystems across 11 chiefdoms. Working in close collaboration with local communities, the project will demonstrate the potential for blue carbon nature-based solutions to sustainably address climate change, protect biodiversity and build income diversification and economic development opportunities.

Mangrove ecosystems are powerful carbon sinks that combat climate change and build coastal resilience. Despite their promise, blue carbon projects struggle to raise private sector investment due to their complexity, extended timelines to scale and high execution risks. FSDAi’s early-stage investment will help de-risk the SRE project and demonstrate the feasibility of structuring financing facilities linked to carbon revenue, enabling project developers to transition from a dependence on scarce philanthropic and concessional funding towards a model that attracts commercial investment. This aligns with FSDAi’s broader mission to mobilise capital and promote development impact in underserved communities. The project is FSDAi’s first direct investment in a nature- based solution and will complement its existing portfolio that enables capital allocation to Africa’s green economic growth by backing existing asset managers and venture builders.

In addition to significantly reducing greenhouse gas emissions and protecting biodiversity, the project is expected to significantly empower the economic livelihoods of local communities. A core component of the project is the development of an innovative, equitable and transparent benefit sharing mechanism in consultation with communities and the government.

Announcing the investment, FSDAi’s Chief Investment Officer, Anne-Marie Chidzero said,

“This strategic US$2.5 million investment in West Africa Blue’s pioneering blue carbon project in Sierra Leone marks a significant step for FSDAi. As our first direct foray into nature-based solutions, it underscores our commitment to demonstrate the financial proposition to financing nature and creating economic opportunities for communities.”

Elizabeth Littlefield, Blue’s Senior Partner, said, “West Africa Blue is grateful for the support and partnership of FSDAi in this groundbreaking project which will be transformative for communities and the coastal ecosystem that is their home. With FSDAi’s support, we aim to set a high benchmark for quality, transparency and fairness including sharing our Benefit Sharing Agreement and other tools, in order to catalyze the nature-based solution market in Africa.”

About FSDA Investments
FSD Africa Investments (FSDAi) is a specialist financial sector investor established by FSD Africa and the UK’s FCDO to strengthen and deepen Africa’s financial markets. We bridge critical funding gaps by investing patient, risk-bearing capital in novel financial instruments, facilities, and intermediaries. Our strategic investments take on early risk, test new models and catalyse capital from others to gradually transition the financial sector to finance Africa’s economic resilience and growth. To date, FSDAi has committed £89.7 million from its £309m capital commitment to 20 investments, and has successfully exited two investments, one at 2x money.
For more information, visit https://fsdafrica.org/fsdai-investments/.

About West Africa Blue
West Africa Blue (“Blue”) is a community-centric developer of high integrity, large-scale, blue carbon projects in West and Central Africa. Blue partners with local communities and governments to develop financially sustainable projects that seek to mitigate climate change, boost community resilience, and protect biodiversity. Based in Freetown, Sierra Leone, Blue has worked in the region for over a decade. Its flagship mangrove conservation and restoration project is in the Sherbro River Estuary of Sierra Leone, with a second project in Guinea and a pipeline of other, early-stage projects. Blue offers its projects as ‘Living Labs,’ sharing its lessons learned, tools, models and even its full Benefit Sharing Agreement, open source, to help develop the market for high integrity nature-based projects in Africa and beyond.
For more information, visit https://www.westafricablue.org/.

Financial Inclusion for Refugees (FI4R) – Results of Round 1 Diaries

Ongoing “Diaries” questionnaires

Open or close financial instruments as needed

Record changes in income sources

Change household roster as individuals leave and join

Record acquisition, loss, or sale of physical assets

Record major household events (ex: death, birth, wedding, etc.)

On-going questionnaires with supplements (shown on circle edge) as needed; automatically updates diary  questionnaire

Financial Inclusion for Refugees (FI4R) – Results of Round 2 Diaries

Project background

The Financial Inclusion for Refugees Project (FI4R) project was launched in 2019 by FSD Uganda and FSD Africa to support financial service providers (FSPs) to offer financial services to refugees and host communities.

The project is supporting three financial service providers (FSPs) Equity Bank Uganda Limited (EBUL), Vision Fund Uganda (VFU) and Rural Finance Initiative (RUFI) to offer financial services to refugees and host communities.

As the learning partner, BFA Global is conducting refugee financial diaries in Uganda to provide insights into the financial strategies employed by refugees over time to build their livelihoods and
manage their finances. The research covers refugees in Bidi Bidi, Palorinya and Nakivale refugee settlements.

The insights from this study aim to build the evidence base for financial service providers, humanitarian agencies and telcos to understand the financial lives of refugees in Uganda and to inform
stakeholders of the opportunities available in serving refugees across different contexts.

Financial Inclusion for Refugees (FI4R) – Results of Round 3 Diaries

Project background

The Financial Inclusion for Refugees Project (FI4R) project was launched in 2019 by FSD Uganda and FSD Africa to support financial service providers (FSPs) to offer financial services to refugees and host communities.

The project is supporting three financial service providers (FSPs) Equity Bank Uganda Limited (EBUL), Vision Fund Uganda (VFU) and Rural Finance Initiative (RUFI) to offer financial services to refugees and host communities.

As the learning partner, BFA Global is conducting refugee financial diaries in Uganda to provide insights into the financial strategies employed by refugees over time to build their livelihoods and
manage their finances. The research covers refugees in Bidi Bidi, Palorinya and Nakivale refugee settlements.

The insights from this study aim to build the evidence base for financial service providers, humanitarian agencies and telcos to understand the financial lives of refugees in Uganda and to inform
stakeholders of the opportunities available in serving refugees across different contexts.

Is it time for a solar receivables finco?

In the last ten years PayGo – the method of distribution and financing of off-grid solar home systems (SHS) – has revolutionized the effort to bring clean, renewable energy to people in Africa without access to electricity.

While the achievements of the PayGo sector are a cause for celebration, the companies that employ this business model have struggled. Several notable companies have failed outright. Others have slowly wound down or continue to struggle. Most – although not all – of the remaining companies have not achieved profitability after five or more years of operations.

Today, those of us working in the PayGo sector are making an effort to understand why PayGo companies have generally not achieved profitability and what can be done about it.

This paper presents our analysis of one of the key weaknesses in the PayGo industry and provides a prescription for the next stage of the industry’s evolution. Our analysis centers around a central feature of PayGo companies: each PayGo company is essentially two businesses. One is a solar products retail distribution company. The other is a consumer finance company, or
“Finco”.

It is estimated that 490 million people are accessing energy through off-grid solar solutions worldwide. In Africa, nearly 50% of these are people that would not have been able to afford solar home systems without the financing provided by PayGo. This is nothing short of remarkable.

CAHF housing finance in Africa yearbook 2016 (7th edition)

FSD Africa’s partner, the Centre for Affordable Housing Finance has produced the 2016 Housing Finance in Africa Yearbook.

The seventh edition of the Housing Finance in Africa Yearbook covers 51 African countries and five regions – an addition of three country profiles this year. CAHF have again sought out new data and refined our approach to the affordability graphs. CAHF have been monitoring the news so that the 2016 Yearbook reflects the current situation of housing finance markets on the African continent.

Download the yearbook here.

CAHF 2017 housing finance in Africa yearbook (8th edition)

FSD Africa’s partner, the Centre for Affordable Housing Finance has produced the 2017 Housing Finance in Africa Yearbook.

The eighth edition of the Housing Finance in Africa Yearbook covers 54 African countries and five regions – an addition of three country profiles this year. CAHF have again sought out new data and refined our approach to the affordability graphs. CAHF have been monitoring the news so that the 2017 Yearbook reflects the current situation of housing finance markets on the African continent.

Download the yearbook here.

CAHF housing finance in Africa yearbook 2015 (6th edition)

FSD Africa’s partner, the Centre for Affordable Housing Finance has produced the 2015 Housing Finance in Africa Yearbook.

Innovation in housing finance –in terms of products, players, and approaches, not to mention target markets – is a key feature across the continent, creating new opportunities for investment and delivery. As both local and international investors chase growth opportunities in a sluggish global economy, they are employing diversification strategies to manage the risks of their traditional targets – and in this, residential property is increasingly becoming an option. And while established players are getting better at what they do, new players are adding to the mix and competing for opportunities.

Investors are faced with a paradox, however. By their very nature, they are drawn to the high income markets. It is in these markets that they can price adequately for risk and realize the returns they seek. However, the real story – the scale opportunity just waiting to be cracked – is in the lower income market segments. The arguments for investment in residential – high urbanization rates, a growing middle class, a shortage of supply – these are all arguments for moving down market into the uncharted waters of affordable housing. Can investors and developers do it? In 2015, this is a very real focus.

Five stories characterize Africa’s housing finance markets in 2015:

1. Innovation in financing
2. Growing awareness of the opportunity in residential
3. The identification of niche markets and an appreciation of the affordability challenge
4. Policy & regulatory evolution to match investor interest
5. Growing experience and investor sophistication

Of course, the challenges are not insignificant. But increasingly, investors and developers are noting that the potential benefits outweigh the risks. And, as governments come to appreciate the potential that this interest offers, their efforts to streamline development processes and enable their local housing markets to grow are creating new opportunities that are beginning to change the face of African cities.

This is the sixth edition of the Housing Finance in Africa yearbook. Since last year, CAHF have added five country profiles and one regional profile bringing the total to 48 country profiles and five regional profiles. CAHF have again sought out new data sources, and rethought their approach to the affordability graphs. CAHF have been monitoring the news so that this yearbook reflects the current situation of housing finance markets on the African continent in 2015.

The Yearbook is intended to provide housing finance practitioners, investors, developers, researchers and government officials with a current update of practice and developments in housing finance in Africa, reflecting the dynamic change and growth evident in the market. It is hoped that it will also highlight the opportunities available for new initiatives, and help practitioners find one another as they strive to participate in the sector. While the general aim of the Yearbook is to offer a broad overview of housing finance and housing development in Africa, special emphasis is placed on the key challenge of housing affordability, and the critical need for housing products and finance that are explicitly targeted at the income profiles of the majority.

This has been a desktop study. Using the CAHF’s research as baseline material, further information on more recent developments was accessed from media reports, journal articles and practitioner websites. In some cases, material was shared with in-country practitioners. Of course, the yearbook is not comprehensive, neither in the scope of countries covered nor the data provided. It is intended as an introduction, with the hope that the detail provided will whet the appetite for more. CAHF invites readers to provide comment and share their experiences on what they are doing in housing finance in Africa.

Download the yearbook here.

CAHF 2018 housing finance in Africa yearbook (9th edition)

FSD Africa’s partner, the Centre for Affordable Housing Finance has produced the 2018 Housing Finance in Africa Yearbook

The 9th edition of the Housing Finance in Africa Yearbook covers 54 African countries and five regions, and is produced in both English and French. Targeted at housing finance practitioners, investors, developers, researchers and government officials, the 2018 Yearbook provides an up-to-date review of practice and developments in housing finance and delivery in Africa, reflecting the dynamic change and growth evident in the market of each country over the past year. In addition to 54 country chapters, regional profiles for Southern, West, North, Central and East Africa discuss trends and provide useful reviews of regional developments, including infographics to present and summarise critical data points, including mortgage lending terms, the price of the cheapest newly built house, and rankings on the ease of doing business.

The publication is produced annually by FSD Africa’s partner, the Centre for Affordable Housing Finance (CAHF), with the contributions of over 30 local experts throughout the continent.

This year, CAHF focus on the theme of innovation, and highlight the examples of innovation that can be found along each link in the housing value chain, as government, the private sector, households and communities find their places in the housing ecosystem. Each of these innovations is identifying a market niche and then working with the opportunities provided by new technologies, adaptive experience, and entrepreneurial curiosity to develop real products and services that are essentially creating brand new markets. Innovation along the value chain and at the local level is making headway and creating precedent that is bankable. The 2018 Yearbook highlights these potential investment opportunities available in each country context, and helps practitioners find one another as they strive to participate in, and advance, the sector.

Download the yearbook here.