Tag Archives: Finance

General

UNDP launches “timbuktoo” initiative in Davos to revolutionize Africa’s startup ecosystem

Annalena Baerbock, Federal Minister of Foreign Affairs of Germany; H.H. Prince Faisal bin Farhan Al Saud, Minister of Foreign Affairs of Saudi Arabia; Christopher A. Coons, Senator, USA; Yusuf Tuggar, Minister of Foreign Affairs of Nigeria; Elina Valtonen, Minister for Foreign Affairs of Finland; and Jens Stoltenberg, NATO Secretary-General, in a session of global security on 16 January. Image: World Economic Forum

Davos 2024

In Davos, the United Nations Development Programme (UNDP) launched the “timbuktoo” initiative in collaboration with African countries. The initiative, unveiled during a special session at the 24th Annual Meeting of the World Economic Forum, aims to be the world’s largest financing facility, uniting catalytic and commercial capital to bolster Africa’s startup ecosystem.

H.E. President Paul Kagame of Rwanda, H.E. President Nana Akufo-Addo of Ghana, the Secretary-General of the African Continental Free Trade Area Secretariat, HE Wamkele Mene, and UNDP Administrator Mr. Achim Steiner presented the initiative to global corporate leaders and African financial institutions. The timbuktoo initiative is poised to spark the African Startup Revolution, leveraging Africa’s youth demographic and innovative talent.

The initiative targets critical gaps in the African startup ecosystem, collaborating with governments, investors, corporates, and universities to foster innovation. H.E. Paul Kagame pledged an immediate contribution of US$3 million to kickstart the timbuktoo Africa Innovation Fund hosted in Kigali, with a billion-dollar target to create opportunities for Africa’s youth.

H.E. Nana Akufo-Addo emphasized the need for supportive structures to enable young Africans to create innovative businesses, contributing to job creation and sustainable economic growth. Administrator Steiner highlighted timbuktoo as a new development model, focusing on startup-friendly legislation, global-class startup building, de-risking capital, and UniPods (University Innovation Pods) across Africa.

Africa currently holds just 0.2 percent of the global startup value, and 89 percent of venture capital comes from foreign sources, with 83 percent concentrated in four countries. timbuktoo seeks to revolutionize Africa’s knowledge-driven economy, turning ideas into pan-African enterprises, attracting global and local investment.

With private venture capital investments in Africa surging six times faster than the global average in 2022, a vibrant youthful population, and expanding tech startups, timbuktoo aims to mobilize US$1 billion to transform 100 million livelihoods and create 10 million new jobs. The initiative’s unique design blends commercial and catalytic capital to de-risk private investment, fostering a pan-African approach to supporting startups and strengthening the entire ecosystem.

Source: AfricaNews, 18th January  2024

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General

DFC Approves Over $3.3 Billion in Investments with a Focus on Africa in Q1 FY2024

 

The U.S. International Development Finance Corporation (DFC) has greenlit a series of strategic investments totaling more than $3.3 billion in the first quarter of Fiscal Year 2024.

The 17 approved transactions, spanning a diverse array of sectors, underscore the DFC’s commitment to advancing global development priorities, with a particular emphasis on fostering growth, sustainability, and empowerment across Africa.

Expanding Global Impact:

DFC’s Board of Directors approved nine transformative projects this quarter, reflecting the corporation’s multifaceted approach to development:

  1. Global Vaccine Access: The DFC will utilize its $1 billion loan facility with Gavi, the Vaccine Alliance, to broaden access not only to COVID-19 vaccines but also to routine childhood vaccines globally.
  2. Empowering Women in the Dominican Republic: A $200 million loan to Banco Popular Dominicano, S.A. aims to empower women entrepreneurs and small businesses in the Dominican Republic.
  3. Energy Security in Eastern Europe: DFC’s support of a €208 million loan to Bulgartransgaz EAD, facilitated by Citi, will enhance energy security in Eastern Europe, reducing dependence on Russian gas supplies.
  4. Small Business Financing in East Africa: A $320 million co-financing effort with Citi will empower CRDB Bank to enhance on-lending capabilities to small businesses in Tanzania and Burundi, with a focus on women-led enterprises.
  5. Clean Energy in Indonesia: A $126 million loan to PT Medco Cahaya Geothermal will boost Indonesia’s renewable energy production by developing geothermal power generation capacity.
  6. Climate and Energy Investment in India and the Indo-Pacific: An equity commitment to Eversource Climate Investment Partners II will drive climate change adaptation and energy transition projects across India and the Indo-Pacific.
  7. Global Food Security: A $250 million loan to Indorama Eleme Fertilizer and Chemicals Limited/SPV Line III will increase fertilizer production in Port Harcourt, Nigeria, strengthening global food security.
  8. Safe Water Access in Angola: DFC’s support of up to $250 million will enable the development of water treatment and distribution infrastructure in Southern Angola, providing reliable, safe drinking water to underserved communities.
  9. Education Access in Emerging Economies: A $250 million loan to a special purpose vehicle (SPV) established by Prodigy Finance Ltd. will enhance access to high-quality education for graduate students from developing nations.

Regional Focus on Africa:

In addition to these board-approved transactions, the DFC has greenlit targeted investments at the sub-board level, with a clear emphasis on Africa:

  1. Critical Mineral Supply Chains in South Africa: A $50 million equity investment in TechMet will support the development of a rare earth element processing facility in South Africa, enhancing global critical mineral supply chains.
  2. Women’s Economic Empowerment Worldwide: A $30 million follow-on loan to the IIX Women’s Catalyst Fund will support the issuance of the sixth IIX Women’s Livelihood Bond, promoting economic empowerment for women globally.
  3. Access to Higher Education in Ukraine: A $10.7 million loan to Ukrainian Catholic University will finance the expansion of the university’s campus in Lviv.
  4. Food Security in Zambia: A $10 million loan to Seba Foods Zambia Ltd. dba 260 Brands will strengthen the food value chain in Zambia by expanding storage and production capacity.
  5. Supporting Ukrainian Small Businesses: A $28 million loan portfolio guaranty to ProCredit Bank Ukraine will catalyze investment in Ukrainian small businesses, especially those in the agricultural sector.
  6. Infrastructure Growth in Zambia: An up to $17.1 million loan to African Eagle Hotels and Resorts will finance the construction and operation of an international hotel in Lusaka, Zambia.
  7. Clean Energy in Africa: Two $10 million loans to SIMA Commercial & Industrial Solar Green Bond B.V. will spur investment in small and medium-sized renewable energy projects across the continent.

Congressional Notification and Global Impact:

Many of these investments are subject to congressional notification, emphasizing the collaborative nature of these strategic endeavors. The DFC’s commitment to fostering sustainable development, economic empowerment, and infrastructure growth across Africa is evident in these diverse and impactful investments.

Source: Today News Africa, 10th January 2024

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General

COP28: Nations finalize fund to compensate developing nations hit by climate change

Climate experts were impressed with discussions on the first day of COP28 in Dubai on Thursday, as nearly all nations finalised the creation of a fund to help compensate countries struggling to cope with loss and damage caused by climate change.

Sultan al-Jaber, the president of the COP28 climate conference, hailed “the first decision to be adopted on Day One of any COP” — and his country, the United Arab Emirates — would chip in $100 million to the fund. Other countries stepped up with big-ticket commitments, including Germany, also at $100 million.

Developing nations have long sought to address the problem of inadequate funding for responding to climate disasters caused by climate change, which hit them especially hard, and for which they have little responsibility — historically industrialised countries have spewed out the most carbon emissions that are trapping heat in the atmosphere.

Senior advocate at the Natural Resources Defense Council Joe Thwaites said that pledges made seconds after the fund was passed through were “unprecedented.”

Avinash Persaud, special climate envoy for Barbados, who was part of the talks to finalise the fund, praised the agreement but added that a significant amount of money would need to be contributed.

“This fund needs to be $100 billion-a-year fund, and we won’t get there overnight. That’s a lot of money. That’s more than half of all of the aid budgets in the entire world,” said Persaud.

Lola Vallejo, Climate programme director at the sustainable development think-tank IDDRI, said the creation on the fund on COP28’s first day was “a great and a very constructive start” — but said it doesn’t answer the questions like who will be eligible and the sustainability of the financing.

Still, experts said the show of unity demonstrated how the world could come together in short order to address devastation left behind from natural catastrophes like tropical storm Daniel that hammered Libya with massive flooding in September, and Cyclone Freddy that battered several African nations early in the year.

Initial steps toward creating the fund was a major accomplishments at last year’s U.N. climate conference in Egypt, but it was never finalised.

Even after Thursday’s agreement, many details of the “loss and damage fund” were left unresolved, such as how large it would be, who would administer it over the long term, and more.

A recent report by the United Nations estimates that up to $387 billion will be needed annually if developing countries are to adapt to climate-driven changes.

The fund will be hosted by the World Bank for the next four years and the plan is to launch it by 2024. A developing country representative will get a seat on its board.

Source:  Africanews

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Nigeria

Nigeria outlook

On Monday, the 14th of January, the Nigeria Outlook event is held annually at the offices of Standard Chartered Bank in London. The event will provide an overview of Nigeria’s current macroeconomic position and discuss the political, economic and commercial prospects for the country in the year ahead. The keynote speaker will be Razia Khan, Chief Economist for East Africa and the Middle East at Standard Chartered Bank. Other speakers will be confirmed soon. Invest Africa members can register interest to Philippa Jalland.

Razia Khan – Chief Economist for Africa and the Middle East, Standard Chartered Bank

With over 20 years of experience covering emerging and frontier markets, Razia Khan is a well-known commentator on the region. She has provided regular updates to Central Banks, finance ministries and sovereign wealth funds. She currently serves on the WEF’s Global Future Council on Migration and on the Advisory Board of the Royal African Society. She was named one of the ‘100 Most Influential Africans’ in 2015 by New African Magazine and the ‘100 Africa Economics Leaders’ by Institut Choiseul (2017). Razia holds BSc and MSc (Econ) degrees from the London School of Economics.

Source: Invest Africa

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Kenya, Nigeria, South Africa

Africa’s direct investment rebound

The number of foreign direct investment (FDI) projects in Africa increased by 6 % in 2017, despite the continent experiencing sluggish growth, according to a report by EY. The top five FDI destinations – which accounted for over half of total investment – were South Africa, Morocco, Kenya, Nigeria and Ethiopia. The uptick in projects came as economic growth in Africa recovered following the lowest growth in over 20 years in 2016.

Source: African Business, Dec/jan 2ß10

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