Finance

BII moves to boost private sector growth in Sierra Leone

Leaders of BII and Ecobank at the signing ceremony.

The transaction marks a significant milestone as the first investment under the Africa Resilience Investment Accelerator. (Image source: BII)

British International Investment, a development finance institution and impact investor, has sought to boost private sector growth in high-impact sectors through the launch of a US$25mn risk sharing facility with Ecobank Sierra Leone

Currently, SMEs provide employment for about 70% of Sierra Leone’s population. Despite representing a crucial component of the country’s economy, BII has noted that these businesses still struggle to gain access to capital due to a number of factors such as limited availability of suitable financial products, high collateral requirements, high interest rates and the prevalence of short-term loans.

The risk sharing facility, which includes a comprehensive technical assistance programme, will therefore support Ecobank to increase lending to ambitious businesses in a frontier market where economic growth is hampered by lack of capital and investment.

“The signing of this agreement with Ecobank Sierra Leone underscores BII’s pioneering role to lead investments in countries that are often overlooked by investors,” remarked Samir Abhyankar, MD and head of financial services, BII. “The facility will be a game-changer for Sierra Leone, providing much-needed capital for ambitious local businesses to accelerate their growth, spur job creation and deepen impact. It’s an example of BII innovating and working with partners to help address pressing challenges where it matters the most.”

Growing Sierra Leone business

Building on US$50mn trade finance facility between the two entities in 2021 (which helped the bank to deepen its reach across Africa), the new facility will support local currency lending. According to BII, it will demonstrate its ability to act as the first mover in frontier markets and drive impact through risk navigation strategies.

Sebastian Ashong-Katai, managing director, Ecobank Sierra Leone, remarked, “We are delighted to have secured the support of British International Investment in boosting Ecobank’s vital lending capacity for Sierra Leone businesses who are the engine room for our country’s growth, economic development and employment. This further strengthens our intent to be the bank of choice for Sierra Leone’s businesses and leverages our delivery of world-class products, services, solutions, borderless digital pan-African platform and business skills training which are designed to support them in further growing their businesses.”

The investment will help Ecobank Sierra Leone to grow its loan book by increasing credit limits and extend lending tenors to up to five years. This is expected to boost business growth, create more jobs and increase private sector contribution to Sierra Leone’s economy.

ARISE IPP raises US$443 catalyse industrial transformation across Africa

An infographic of a city line with information around the announcement above.

The investment is anticipated to strengthen Africa's position in global value chains. (Image source: Afreximbank)

ARISE IIP, a pan-African developer and operator of industrial parks, has announced a significant capital raise of US$443mn

The capital was primarily attained through a US$300mn investment from The Fund for Export Development in Africa (FEDA), Afreximbank’s development impact investment arm, and a US$143mn contribution from Africa Finance Corporation (AFC).

“This equity partnership with Afreximbank significantly enhances our financial capacity to execute our pan-African industrial development strategy,” commented Gagan Gupta, founder and CEO of ARISE IIP. “It’s a strong vote of confidence in our business model and growth prospects.”

As a result of this development, ARISE IPP’s total equity capital now exceeds US$1bn. The funds are intended to accelerate its fast expansion and operational efficiency across its 12-country portfolio and are aligned with the entities’ objective to catalyse industrial transformation across the continent.

President & chairman of board of directors at Afreximbank, Benedict Okey Oramah, remarked, “We are very pleased with our latest investment in ARISE IIP which is aligned with Afreximbank’s strategic pillars of promoting intra African Trade and facilitating industrialisation and export development across Africa. The capital boost will arm ARISE IIP with the financial muscle needed to drive Africa’s industrialisation, promote intra and extra-African trade, job creation and the general economic growth of our continent.”

Samaila Zubairu, president & CEO of AFC, added, “Our journey towards capturing greater value within the continent, by converting raw materials into intermediate and finished goods, has already shown significant progress in three countries, with an expanding pipeline of projects in ten more. This success reinforces our commitment to further support and invest in this important initiative, including our latest equity investment of US$143mn.”

Trade visit brings new UK-Kenya investment partnership

John Humphrey ringing the trading bell alongside leaders from MOBILIST, NSE, FSD Africa, AIB-AXYs and Capital Markets Authority. (Image source: MOBILISE)

At a launch event in Nairobi, UK Government programme MOBILIST announced a new partnership with the Nairobi Securities Exchange (NSE)

This will drive the listing of new investment products in the Kenyan market and increase the amount of private sector capital available for development and climate projects in Kenya.

MOBILIST, which boasts similar partnerships with several emerging market exchanges including the Nigerian Exchange and Johannesburg Stock Exchange, provides investment and technical assistance to help businesses that contribute to the United Nations Sustainable Development Goals to overcome the barriers that keep them from listing on a stock exchange.

“The NSE is delighted to partner with the UK government-backed MOBILIST Programme,” remarked NSE CEO, Frank Mwiti. “The strategic partnership between the NSE and MOBILIST aligns with our new strategic focus aimed at enabling the NSE to play a more dynamic role in mobilising and channelling capital to sectors that have the most significant capital needs, with a special focus on sustainable development. As a market, we will continue providing a pivotal intersection connecting capital to investment-grade opportunities in Kenya for sustained economic growth.”

Reaffirming UK-Kenya ties

The launch was attended by the UK’s Trade Commissioner for Africa, John Humphrey, as he began a three-day visit to the East African country following his recent trips to Egypt and Ethiopia. In his time in Kenya, Humphrey will focus on delivering long-term investment projects that support the UK-Kenya Strategic Partnership – a five-year agreement that seeks to unlock mutual economic benefits for the two countries.

“Mobilising investment solutions in Kenya are vital to economic growth as they provide a platform for Kenyan businesses to raise the capital they need to expand their operations, increase cross-border trade, and employ more Kenyans – and at the same tackle climate change and achieve critical development goals,” commented Humphrey.

“Long-term investments that deliver lasting change for the people of both our countries are the cornerstone of the UK-Kenya economic relationship. We go far when we go together – I am delighted to be back in Kenya to deliver our mutually beneficial partnership which is rooted in respect.”

Saudi Arabian investment into Africa praised by AfDB

Akinwumi Adesina attending the event in Riyadh and smiling in conversation with a stakeholder.

Akinwumi Adesina attending the event in Riyadh. (Image source: AfDB)

Speaking at the Saudi Fund for Development’s 50th anniversary celebration, Akinwumi Adesina, president of the African Development Bank Group (AfDB), has praised Saudi Arabia for its support, dedication and friendliness to Africa

The president said the fund translated the pulse of the Kingdom of Saudi Arabia into development support in Africa. “Its work covers 407 projects in 41 countries in sub-Saharan Africa, with support of over US$5.3bn,” he noted.

As outlined by AfDB, projects the country has financed range from irrigation to produce food, dams for energy, hospitals for mothers and their babies, electricity to light up schools and enhance learning, airports and roads to link countries, counties and communities. These efforts have been part of an attempt to develop a deeper friendship and engagement between Saudi Arabia and Africa.

Adesina remarked that the Saudi Fund for Development stands out in the development financing landscape due to its “unlimited territorial scope” and its focus on “countries need”.

“That means: Open heart. Open hands. Open purse. Its success is rooted in its values, reflected by its acronym, SDF, which I call: Supportive. Dedicated. Friendly. That’s why countries appreciate the SDF,” he continued. “The African Development Bank is your friend and strategic partner in Africa… I wish the Saudi Fund for Development another 50 exciting years ahead, as we partner together to support Africa with renewed dedication to accelerate Africa’s development.”

AIIF4 exceeds fundraising target by 50%

Coins stacked on top of Africa on a world map.

Since inception, AIIM has raised more than US$4bn over eight funds and executed more than 70 transactions in target pan-African markets

African Infrastructure Investment Managers (AIIM), Africa’s largest dedicated sustainable infrastructure equity manager, has announced the final close of its fourth pan-African infrastructure fund which achieved its hard cap, with US$748mn raised

The African Infrastructure Investment Fund 4 (AIIF4) raised the funding from a diverse investor base across Africa, Europe, Canada, US, Middle East and Asia with an additional US$206mn approved for co-investments alongside the fund.

According to AIIM, in doing so the fund has exceeded its target by 50% with more than half of the capital coming from new investors. This has been taken as a demonstration of the strong show of support for the Fund’s thematic strategy, its team and regional experience, and its high-quality cornerstone portfolio.

AIIM has indicated that through the AIIF4 mandate, the organisation is doubling down on its commitment to tackling climate change by setting decarbonisation and energy efficiency goals and maximising emissions avoidance opportunities through renewable energy deployment for each investment. The Fund is also a 2X Challenge Fund through AIIM’s strategies to enhance gender diversity across its investment teams and the management teams across portfolio companies.

“Given the challenging global fundraising environment, we are delighted to have outperformed the targeted fund size,” remarked Paul Frankish, AIIM’s head of strategic initiatives. “We received strong support from our existing investor base with a high level of re-ups from the supporters of our previous mandates which served to anchor the fundraising. We have also seen many new investors seeking to diversify their investment allocations into new markets which they consider provide strong long-term growth potential, as well as seeking investments with well-defined sustainability and impact strategies.

“These investors have all sought to enter Africa, as a new market with high growth and impact potential, alongside AIIM due to our long track record in the region and strong on-the-ground local presence.”

Olusola Lawson, AIIM's managing director and co-CEO, added, “In developing the strategy we have focused on key themes which provide investors with long-term growth driven by structural deficits and secular tailwinds rather than volatile macro-economic cycles. This includes digital infrastructure, to capitalise on the surge in data consumption across the continent; energy transition, to address the chronic shortage of affordable power and the associated productivity losses for Africa’s corporates; and transport, ports and logistics, to meet the demands for moving goods and people through the world’s most rapidly urbanising cities. All investments by the fund are specifically tracked against climate, gender and governance objectives.”

Earlier in the year, AIIM achieved financial close on two wind farms in South Africa to supply renewable energy for Rio Tinto’s operations. Click here to learn more.