African Loans – Bungeni http://bungeni.org/ Fri, 23 Jul 2021 02:17:41 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://bungeni.org/wp-content/uploads/2021/05/bungeni-icon-150x150.png African Loans – Bungeni http://bungeni.org/ 32 32 Seychelles: African Development Bank approves $ 20 million loan to support Covid-19 recovery – Seychelles https://bungeni.org/2021/07/23/seychelles-african-development-bank-approves-20-million-loan-to-support-covid-19-recovery-seychelles/ Fri, 23 Jul 2021 00:19:35 +0000 https://bungeni.org/2021/07/23/seychelles-african-development-bank-approves-20-million-loan-to-support-covid-19-recovery-seychelles/

The Board of Directors of the African Development Bank Group approved a flexible loan of $ 20 million to finance the Seychelles Governance and Economic Reform Support Program, which is expected to contribute to the macroeconomic stability of the island nation and recovery after Covid-19 in the medium term.

The government program aims to deepen the reforms introduced as part of the Bank’s budget support program for the response to the Covid-19 crisis, approved in June 2020 for $ 10 million. These reforms are expected to advance fiscal sustainability, improve the business environment and Seychelles’ resilience to climate change and the environment.

Bank financing will complement funds from the World Bank and the International Monetary Fund to support reforms that will benefit Seychelles’ private sector, dominated by small businesses. By ensuring that these businesses stay afloat during these difficult times, the operation will have a positive impact on women and young people, while creating jobs and equal opportunities.

Seychelles Minister of Finance, Trade, Investment and Economic Planning Naadir NH Hassan thanked the Bank for being a trusted partner in the development of the country. “The installation comes at an opportune time and will provide much-needed relief given the economic hardships we face in light of the Covid-19 pandemic. This will help the government to close the current budget financing gap and achieve economic development goals as we steer the country on the path of recovery and debt sustainability, ”Hassan said.

The global slowdown resulting from the Covid-19 pandemic has adversely impacted the Seychelles economy, despite government interventions.

“The Covid-19 pandemic has devastated the tourism sector, which contributes around 25% of GDP and accounts for the largest share of total employment,” said Nnenna Nwabufo, director general of the Office of Regional Development and Delivery of the Bank Group in East Africa.

She noted that on the same day the loan was approved, the IMF and the government of Seychelles reached a staff-level agreement for a $ 107 million arrangement under the Fund’s extended financing facility, which underlines the speed of the Bank’s intervention and the strength of the partnership. between the Bank and the IMF.

The pandemic has severely affected the macroeconomic performance of Seychelles. Real GDP growth, which averaged 4.2% in 2016-2019, contracted by 12.9% in 2020. The overall budget deficit ranges between -1.4% and 0.7% of GDP over the period 2016-2019 widened to -19.5% in 2020, while the debt, which stood at 62.3% of GDP at the end of 2018, is now projected at 87.7% at the end of 2021 , according to the Bank’s appraisal report.

The Bank’s approved and ongoing portfolio in Seychelles in July 2021 includes five public sector operations totaling $ 45.7 million. Of these, 53% are in the water supply and sanitation sector and 47% in the multi-sector.

Contact:

Kwasi Kpodo, Department of Communication and External Relations, African Development Bank. Email: w.kpodo@afdb.org

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UAP gets more time to settle Sh8bn Old Mutual, Stanbic loan https://bungeni.org/2021/07/20/uap-gets-more-time-to-settle-sh8bn-old-mutual-stanbic-loan/ Tue, 20 Jul 2021 21:00:32 +0000 https://bungeni.org/2021/07/20/uap-gets-more-time-to-settle-sh8bn-old-mutual-stanbic-loan/

Companies

UAP gets more time to settle Sh8bn Old Mutual, Stanbic loan


UAP Insurance Building in Nairobi. PHOTO FILE | NMG

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summary

  • Insurance group UAP Holdings has restructured 8 billion shillings in loans from its parent company Old Mutual Holdings and Stanbic Bank, delaying repayment of credit facilities by two to three years.
  • A 2.2 billion shilling loan from Stanbic Bank, which was due to mature in January 2021, will now be repaid in 2024.

Insurance group UAP Holdings has restructured 8 billion shillings in loans from its parent company Old Mutual Holdings and Stanbic Bank, delaying repayment of credit facilities by two to three years.

A 2.2 billion shilling loan from Stanbic Bank, which was due to mature in January 2021, will now be repaid in 2024.

“This refinancing deal was made after the year-end in February 2021. The new facility has a three-year term,” UAP said of the Stanbic loan in its latest annual report.

The insurer took out the bank loan on July 17, 2019 and used it to repay its corporate bond, which was then due. The Stanbic loan drew an interest rate based on the central bank rate (currently at seven percent) plus a 1.5 percent margin.

A loan of 5.8 billion shillings from South Africa-based Old Mutual, which has a 66.7% stake in the insurer, was also due in January 2021 and will be paid next year.

“By mutual agreement with the directors of Old Mutual Holdings Limited, the maturity date of loans maturing in January 2021 for a total of 5.8 billion shillings has been extended until 2022, with the directors taking arrangements to settle the loan, ”UAP said in the report.

Part of the Old Mutual loans were used to withdraw a 3.3 billion shillings facility from South Africa-based Nedbank last year.

Old Mutual loans have variable interest rates ranging from 7.6% to 11.1% based on the margins added to various benchmarks including CBR and the 3-month London Interbank Offered Rate (Libor) .

This is the latest loan restructuring at UAP following the insurer’s renegotiation of credit facilities (including those provided by Old Mutual and Stanbic) totaling 10.1 billion shillings in 2019.

UAP also renegotiates the terms of other loans after breaching them.

“During the year one violation was recorded for the Norfund and IFC facilities at UAP Properties in South Sudan. The outstanding balance of the two facilities as at December 31, 2020 was $ 3.3 million (357 million shillings) divided equally between the two lenders, ”said the insurer.

“Repayments continue to be made on loans on a timely basis. To remedy the breach, management urges the lenders to renegotiate the covenants. “

PSU borrowings reached 13 billion shillings in the year ended December, up from 11.4 billion shillings a year earlier, while interest charges over the period fell to 1.1. billion shillings against 1.2 billion shillings.

The insurer reported a net loss of 1.3 billion shillings in the year ended in December, reducing it from 3.4 billion shillings a year earlier.

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coalition including Google, GivePower and Silfab Solar brings solar power to one of Africa’s oldest national parks and an important school of peace in the Democratic Republic of Congo | Texas News https://bungeni.org/2021/07/20/coalition-including-google-givepower-and-silfab-solar-brings-solar-power-to-one-of-africas-oldest-national-parks-and-an-important-school-of-peace-in-the-democratic-republic-of-congo-texas-news/ Tue, 20 Jul 2021 10:00:00 +0000 https://bungeni.org/2021/07/20/coalition-including-google-givepower-and-silfab-solar-brings-solar-power-to-one-of-africas-oldest-national-parks-and-an-important-school-of-peace-in-the-democratic-republic-of-congo-texas-news/

AUSTIN, Texas, July 20, 2021 / PRNewswire / – GivePower Foundation, a non-profit organization committed to extending the environmental and social benefits of clean and renewable energy around the world, has completed three solar projects in the Democratic Republic of Congo (DRC) in partnership with Nuru, a Congolese renewable energy company. The facilities, designed to help protect endangered wildlife and support children historically affected by violence, were made possible by Congo Power, an initiative supported by Google, and by Silfab Solar, which generously donated materials. .

Solar projects will help protect endangered wildlife and support children historically affected by violence.

“The work we do with our partners in the Democratic Republic of Congo is both extremely difficult and incredibly meaningful, ”said Hayes Barnard, Founder and Chairman of GivePower. “The DRC is rich in resources that have fueled conflict and instability for decades, while access to electricity remains scarce. Through our collaboration with Congo Power, Google and Silfab Solar, we will collectively open up new opportunities to scale clean energy solutions led by the community. “

Two communities (Tadu and Faradje) surrounding Garamba National Park, a UNESCO World Heritage Site since 1980 where armed conflict and instability in recent decades have led to an increase in poaching, now have mini solar grids that will bring reliable and clean energy to the surface. The mini-grids, which were built and operated by Nuru, were largely funded by the European Union through its partner African Parks Network, a non-profit organization working to revitalize conservation areas currently under threat. With access to stable and affordable electricity, the communities of Tadu and Faradje are less dependent on resource extraction from the park and have a greater capacity to generate sustainable livelihoods that do not degrade the surrounding natural environment.

Additional financial support for solar mini-grids included the forward purchase by Google of Peace Renewable Energy Credits (P-REC), an innovative financing instrument developed by Energy Peace Partners (EPP) to help fund energy projects. high impact renewable energy that promotes peace and stability. . Google’s support further expands the P-REC marketplace launched by EPP and Nuru in the Democratic Republic of Congo in 2020.

The Congo Peace School solar project will help provide vulnerable young people with quality education in a region affected by conflict. In addition to teaching the standard Congolese curriculum, the one-of-a-kind primary and secondary school offers nutritious meals, access to a computer lab, and training in non-violent dispute resolution. The school is run by ABFEC, a Congolese-owned and operated non-profit organization, with financial support from US non-profit organizations Action Kivu and The Dillon Henry Foundation. Action Kivu provides direct assistance to survivors of the current humanitarian crisis by Eastern Congo through entrepreneurship training and education projects rooted in peace and equality.

The three solar projects were led by Congo Power, an initiative launched in 2017 that aims to strengthen responsible trade in minerals and expand economic opportunities in the African Great Lakes region through the deployment of clean energy. The founding members of Congo Power are Google, GivePower, and the grassroots peacebuilding organization Resolve. the University of California at Berkeley Renewable and Appropriate Energy Laboratory, led by Dan Kammen, also plays an important role in measuring and communicating the impact of these solar energy systems.

“We are committed to supporting communities engaged in conflict-free mining, reducing dependency by enabling livelihoods with clean energy, and improving the lives of people living near natural resource extraction sites. Providing access to clean electricity is a powerful way to achieve this ”, mentioned Alyssa newman, supply chain manager at Google and founder of Congo Power. “We are grateful to GivePower for the design and management of our latest Congo Power projects, and to Silfab for the donation of solar equipment that will have a lasting positive impact.”

The facilities in the two communities surrounding Garamba National Park as well as the Congo Peace School project are powered by premium quality solar photovoltaic modules from Silfab Solar. Building on 40 years of experience in solar power and advanced manufacturing technologies, Silfab’s donation will ensure the three sites have constant access to clean energy for many years to come.

“Silfab Solar is proud to have participated in the incredible work done by GivePower, Google and the Congo Power project. We are committed to improving access to clean and sustainable energy around the world and look forward to continuing our collaborations with our GivePower partners. ,” mentionned Geoff atkins, sales and marketing manager at Silfab Solar.

About GivePower

GivePower is a 501 (c) (3) non-profit organization committed to expanding the environmental and social benefits of clean, renewable energy around the world. GivePower uses solar and battery-powered storage technologies to deliver essential services to the developing world. The organization has helped provide clean electricity and water to underserved communities in more than 20 countries in Africa, Asia and Latin America. Visit GivePower at www.givepower.org. Follow GivePower on Facebook, Instagram, Youtube and Twitter.

About Silfab Solaire

Silfab Solar is the North American leader in the design, development and manufacture of ultra-high efficiency, premium quality photovoltaic modules. Silfab leverages 40 years of solar experience and cutting edge technologies to produce the top rated solar modules from facilities in the state of Washington and Toronto, Canada. Each facility has multiple ISO 9001-2015 certified automated production lines using just-in-time manufacturing to deliver specially designed and dedicated Buy American approved PV modules to the North American market. www.silfabsolar.com

Media contacts:

Julia Pyper

Vice President of Communications

jpyper@givepower.org

Aparna Mohla

Vice President of Corporate Partnerships

aparna@givepower.org

Geoff atkins

g.atkins @silfabsolar.com

Phone. : + 1-905-255-2501 Ext. 737

www.silfabsolar.com

View original content to download multimedia: https://www.prnewswire.com/news-releases/coalition-include-google-givepower-and-silfab-solar-brings-solar-power-to-one-of-africas -oldest-national-parks-and-an-eminent-school-of-peace-in-the-democratic-republic-of-the-congo-301337051.html

SOURCE Empower


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Campaign aims to free black women from the burden of student debt https://bungeni.org/2021/07/19/campaign-aims-to-free-black-women-from-the-burden-of-student-debt/ Mon, 19 Jul 2021 20:13:00 +0000 https://bungeni.org/2021/07/19/campaign-aims-to-free-black-women-from-the-burden-of-student-debt/

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COLUMBUS, Ohio – Black women have more student loan debt than any other group, and a national petition has been launched to write off $ 50,000 in student debt for each borrower.

Supporters say it would help build a better future for black women.

More than 28,000 people have already signed the petition asking the Biden administration to write off the debt, which advocates say would help close the racial wealth gap of at least 20%.

Shakya Cherry-Donaldson, executive director of the nonprofit 1000 Women Strong, said there was not enough focus on solutions to free black women from the ever-increasing burden of debt.

“We know that a black woman who obtains a bachelor’s degree is paid the same as a white man who has a high school diploma; a black woman who has a master’s degree is paid the same as a white man. with a bachelor’s degree, ”Cherry said. -Donaldson describes. “We cannot catch up, even with education and experience on our side.”

Data from the US Department of Education shows significant race-based differences in the amount of debt that students of color bear and can easily pay. The goals of the campaign and petition are to empower black women and close the gap from current trends.

Studies show that African American families are more likely to borrow than White, Latino or Asian families, and black women are often the primary breadwinners.

Cherry-Donaldson stressed that they are looking for opportunities to build wealth.

“For our current families, but also to invest in things like real estate, real estate, starting our own businesses, all of which require capital or some type of loan process,” Cherry-Donaldson explained. “We are completely excluded because we carry the burden of student debt.”

She added that the group hopes to find an ally in Kamala Harris, given her experience as the first woman, first black woman and first vice president of Asian descent.


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Two Nigerians become partners in an American law firm https://bungeni.org/2021/07/18/two-nigerians-become-partners-in-an-american-law-firm/ Sun, 18 Jul 2021 23:52:08 +0000 https://bungeni.org/2021/07/18/two-nigerians-become-partners-in-an-american-law-firm/

David-Chyddy Eleke

An international law firm, McDermott Will & Emery, which is said to be the largest law firm in the United States of America (United States), announced the addition of two Nigerian lawyers, Emeka Charles Chinwuba and Nexus Uzoma Sea as partners of the firm.

While Chinwuba will work in its transactions practice group, Uzoma will work in its New York-based litigation practice group.

McDermott Will & Emery, which employs more than 1,200 lawyers, partners with leaders around the world to fuel missions, break down barriers and shape markets. His team works seamlessly across practices and industries to deliver highly effective solutions that propel success.

The two Nigerians are expected to provide strategic advice in the areas of project finance and complex litigation to some of the world’s most esteemed companies, including multinationals and Fortune 500 institutions with operations based in Africa.

“In a spirit of continuous innovation and truly comprehensive customer service, we are delighted to add Emeka and Nexus to our Transactions and Litigation teams.

“As we emerge from the pandemic, clients face increased legal hurdles in different areas of law. Having worked together for years, Emeka and Nexus form a proven team, providing streamlined legal advice to meet the needs of interdisciplinary clients, ”said Michael Poulos, Chief Strategy Officer of McDermott.

Uzoma and Emeka are founding members of “1844,” an African-American lawyer association, founded in 2014 to address the challenges of industry representation and promote collaboration, business development and mentorship.

The name “1844” underlines the year the first African American, Macon Bolling Allen, was admitted to practice law in America. The work of 1844 positively impacts hundreds of diverse summer associates of law firms through its annual summer associate panel discussion, and it benefits college and high school students alike. thanks to its collaboration with Legal Outreach.

Tony Upshaw, Miami-based litigation partner and global chair of the firm’s Diversity and Inclusion Committee, said, “In addition to superior technical knowledge in their respective practices, Emeka and Uzoma are pioneers in the fight to eliminate unfair barriers for people of color. in the legal field.

“The Foundations of 1844 align with our commitment to showcasing diverse legal and leadership talents, which will be accelerated by these exceptional lawyers. We are delighted that they have chosen McDermott to continue this important work.

In his speech, Uzoma said they were incredibly excited to join the McDermott team, assuring that they would join forces to provide the best legal services to their mutual clients.

Nexus and Emeka were both previously elected president of the Nigerian Lawyers Association at different times in their careers.

Additionally, Emeka recently received recognition from Congress as one of the “30 Black Stars” at the Face2Face Africa Conference and Awards. He is a debt attorney focusing on energy and infrastructure project finance transactions, including conventional and renewable energy, acquisition finance transactions, and public-private partnerships at United States. His work has covered complex financing projects in the United States, South America, the Middle East and sub-Saharan Africa.

He worked for a long time in the United Arab Emirates, where he advised the development and financing of renewable energy projects in the MENA region. It also covers general bank financing transactions, mezzanine and investment grade financing and asset lending transactions.

For his part, Uzoma is a seasoned litigator and rising star trial lawyer representing leading companies in complex commercial litigation, product liability issues and financial services in state and federal courts. Its clients include Fortune 500 companies, financial institutions and pharmaceutical companies. His practice also includes the emerging field of artificial intelligence and its impact on existing product liability regimes.

He represented one of Africa’s most prominent business leaders in successfully foiling a trade secret lawsuit seeking at least $ 1 billion in damages. In addition, he has successfully conducted internal investigations on behalf of financial institutions, including allegations of cross-trading on behalf of a New York fund of funds and allegations of agent embezzlement on behalf of a New York fund of funds. cosmetics start-up.


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Eurobond yields rise on Covid, political nervousness https://bungeni.org/2021/07/17/eurobond-yields-rise-on-covid-political-nervousness/ Sat, 17 Jul 2021 17:44:21 +0000 https://bungeni.org/2021/07/17/eurobond-yields-rise-on-covid-political-nervousness/

By JAMES ANYANZWA

Kenya Eurobonds traded on the Irish and UK stock markets face moderate demand amid concerns over the Covid-19 pandemic and uncertainties surrounding the outcome of cases to block the Building Bridges bill Initiative (BBI) which aims to expand the size of government through Popular Vote.

Kenya has raised $ 7.85 billion through Eurobond issues over the past seven years, which are listed on the Irish Stock Exchange (ISE) and the London Stock Exchange (LSE).

Data from the Central Bank of Kenya shows that Eurobond yields, which rise when prices fall, rose six basis points in the week ending July 8, 2021.

The rise in bond yields signals an increase in the country’s sovereign risk rating, which has the effect of reducing the prospects for success of future Eurobond issues. Changes in bond yields, however, do not affect the country’s interest payment on Eurobonds traded on the secondary market.

Economists at the British Standard Chartered Bank have attributed the fall in prices and growth in Kenyan Eurobond yields to foreign investors worried about the response to the third wave of Covid-19 and the uncertainties associated with it. ‘outcome of the Court of Appeal. petition on constitutional amendment by referendum.

“A move of six basis points is not very high. However, there have been price losses on Eurobonds in recent weeks due to what is happening in both global and local markets, ”said Eva Otieno, Senior Africa Strategy Officer. group.

Publicity

“Around the world, investors view emerging markets as markets that have been heavily affected by the third wave of the Covid-19 pandemic,” she told The EastAfrican.

BBI factor

According to Ms Otieno, the proposed constitutional amendment campaign has a huge impact on the performance of Eurobonds in international markets.

“BBI presents significant fiscal risks in terms of financing the broader form of government from an economic perspective,” she said.

“A move in favor of the BBI would likely result in losses on Kenya Eurobonds due to risks to the fiscal outlook, with higher fiscal spending expected. On the other hand, a negative verdict would likely be favorable to Kenya Eurobonds, as investors would interpret this to mean that spending pressures will be contained. “

In 2014, Kenya issued a $ 2 billion Eurobond and took out an additional $ 750 million, while the second $ 2 billion Eurobond was issued in February 2018. In May 2019, Kenya raised $ 2.1 billion in international capital markets to repay other loans, including a $ 750 million Eurobond maturing June 24, 2019 and other debt securities.

In June this year, Kenya raised an additional $ 1 billion by issuing a 12-year 6.3% Eurobond.

Three global rating agencies, S&P, Fitch and Moody’s Investor Service, downgraded the country’s credit rating in large part due to its faster-than-expected debt build-up in the face of declining revenue collection and a declining economy. difficulty, raising fears of a risk of over-indebtedness.

According to Gregory Smith, emerging markets fund manager at global investment management firm M&G Investments, African countries issued $ 11.8 billion in Eurobonds in the first half of 2021, out of a total of ‘$ 109 billion emerging market sovereign issues.

These were Kenya ($ 1 billion, 12.5 years at 6.3%), Ghana ($ 3 billion, multiple bonds with the 13-year portion at 8.625%), Benin (1.18 billion dollars, 11 years at 4.875%); Senegal (944.58 million, 16 years at 5.375%) and Cameroon ($ 826.5 million, 11 years at 5.95%).


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Nigeria seeks $ 1 billion for key gas pipeline pending Chinese loans https://bungeni.org/2021/07/16/nigeria-seeks-1-billion-for-key-gas-pipeline-pending-chinese-loans/ Fri, 16 Jul 2021 09:53:00 +0000 https://bungeni.org/2021/07/16/nigeria-seeks-1-billion-for-key-gas-pipeline-pending-chinese-loans/

The headquarters of the Nigerian National Petroleum Corporation (NNPC) are in Abuja, Nigeria on July 28, 2017. REUTERS / Afolabi Sotunde

  • Chinese infrastructure loans across Africa have plummeted
  • NNPC says it is still seeking funds from Chinese lenders
  • Chinese lenders feel too exposed in Nigeria, source says

LAGOS, July 16 (Reuters) – Nigeria is seeking $ 1 billion to continue work on a gas pipeline costing up to $ 2.8 billion after Chinese lenders who had pledged to offer most of the funds failed have not disbursed money as quickly as expected in the said case.

It is the latest sign of declining Chinese financial support for infrastructure projects across Africa, after years of large Chinese loans for rail, energy and other projects.

A spokesperson for state-owned oil company NNPC, which is building the 614-km (384-mile) Ajaokuta-Kaduna-Kano (AKK) pipeline, said he is still negotiating with Chinese lenders – Bank of China and Sinosure – to cover $ 1.8 billion. the cost of the project.

“There is no reason to be alarmed,” the spokesperson said, without saying whether the NNPC was looking to other lenders.

But all three sources told Reuters the company is now approaching others, including import-export institutions, to continue work on the pipeline that will run through the center of the West African country to its economic center north of Kano.

Chinese lenders were initially aligned to finance most of the estimated $ 2.5-2.8 billion cost of the project, which is at the heart of President Muhammadu Buhari’s plan to expand gas resources and boost development in the northern Nigeria.

The NNPC, which was funding 15%, said last year it used its own funds to start construction. The sources said Chinese lenders would not agree to disburse the money the NNPC was expecting by the end of the summer, prompting it to look to others.

“They see Nigeria as one loan, and right now they think they are too exposed,” a source said.

The Bank of China has said it will not comment on specific agreements. Sinosure did not respond to a request for comment.

Nigeria’s ministries of transport, finance and petroleum also did not respond to requests for comment.

Chinese bank loans to African infrastructure projects have plummeted across the continent, from $ 11 billion in 2017 to $ 3.3 billion in 2020, according to a Baker McKenzie report in April.

With the continent facing an annual infrastructure investment gap estimated at $ 100 billion, the loss of Chinese funding leaves a great void to fill.

Nigeria started building the AKK gas pipeline in June 2020, saying it will help generate 3.6 gigawatts of electricity and support gas industries along the route. The project was to be financed through a debt financing model, backed by a sovereign guarantee and repaid through the pipeline transport tariff.

NNPC awarded engineering and construction work along three sections of the pipeline to Oando, OilServe, China First Highway Engineering Company, Brentex Petroleum Services and China Petroleum Pipeline Bureau.

Transport Minister Rotimi Amaechi said this month that Nigeria was negotiating a mix of loans from Chinese and European lenders to fund rail projects, after media said it initially planned to rely primarily on on Chinese banks.

Additional reporting by Camillu Eboh in Abuja and Cheng Leng in Beijing; Editing by Veronica Brown and Edmund Blair

Our Standards: Thomson Reuters Trust Principles.


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Why patience is a virtue in the race to reach net zero https://bungeni.org/2021/07/15/why-patience-is-a-virtue-in-the-race-to-reach-net-zero/ Thu, 15 Jul 2021 07:48:31 +0000 https://bungeni.org/2021/07/15/why-patience-is-a-virtue-in-the-race-to-reach-net-zero/

  • Infrastructure projects in emerging and frontier markets are seldom financially viable on their own due to financial, technical and regulatory barriers.
  • “Patient capital” provides the time and space to start high quality infrastructure projects.
  • Targeted investments of public funds can catalyze private sector investments in infrastructure projects that contribute to global net zero.

Sub-Saharan Africa, South and Southeast Asia have some of the world’s lowest historical and current greenhouse gas emissions per capita. However, they are often the most affected by climate change, facing risks to health, livelihoods, food security, water supply and economic growth. Patient capital and development leadership can spur efforts to provide climate resilient infrastructure that responds to these impacts. The long-term nature of patient capital – combined with the fact that it is often supported by both the public and private sectors – means that it is an important lever in the just transition to global net zero.

The challenge of attracting smart capital to where it is most needed

Infrastructure development straddles several sectors identified as the main drivers of the race to net zero: energy, transport, logistics, agriculture, water and sanitation. While CO2 emissions in developing markets remain low compared to countries like China and the United States, populations are growing rapidly. Without access to infrastructure that goes beyond fossil fuels and combustion engines, emissions in these regions will increase over the next decades. There is also the issue of social justice. Access to infrastructure must be equitable, it must allow jobs and meet the aspirations of the predominantly young population, and it must be delivered quickly.

Although we have seen increased investor interest in renewables in recent years, the lack of bankable projects remains a major challenge in bridging the infrastructure gap in emerging markets.

What is “bankability” and why is it important?

In short, bankability is whether a project or business has the potential to be commercially viable. If this is the case and meets the strict thresholds of a funder or lender, the project secures the investment, whether it is a bank loan or long-term debt. term and an investment in shares of private investors or pension and insurance funds. As the risk / return profile of most investors is not well suited to developing projects in frontier markets, many good projects fail to become bankable.

This is where patient capital comes in

In the context of infrastructure, patient capital takes a relatively small amount of public money – and invests it in projects that could help fill a market gap and bring benefits to the communities they are meant to serve.

By leveraging the value of public sector funding, but doing so with a private sector mindset, it is possible to target the link between an innovative concept and a bankable reality. By demonstrating the value of new economic models and piloting technical solutions, the objective must be to mobilize the private investments essential to make these projects sustainable..

Transformation of a renewable energy project on the grid from concept to operation can take between five and 10 years in emerging markets. These deadlines require patience, political will and a willingness to innovate to overcome obstacles; these behaviors can be activated by the support of multilateral donors in the form of patient capital.

What distinguishes the patient capital model from pure business investment is that while it seeks a decent return, it is not just an investment of money, but an investment of time.

And this time should be used wisely.

Creating sustainable infrastructure projects involves working with key stakeholders, including governments and regulators, to develop new regulatory frameworks favorable to the private sector. Throughout the process, we work hand in hand with local partners to develop their business models and integrate international standards of governance, health and safety, environmental management and more. We prioritize the empowerment of women and girls.

In short: patient capital and development leadership drive a process that is neither quick nor easy, but which holds the key to projects that are more resilient, profitable and capable of attracting more private investment to the market. long term.

Show – don’t say

The key is not only to deliver a successful wind power project or electric mobility initiative, but to allow that success to expand. Successful projects must be replicated in a way that transforms lives and livelihoods while supporting the clean energy transition that is so vital in the race to net zero.

Just like baking, once you’ve perfected the recipe and baked your first cake – a cake that smells and tastes great – you can do a lot more. InfraCo Africa is close to completing its first large-scale mini-grid project, serving 12,500 clients in rural Sierra Leone, and recently completed a second such transaction, using the expertise gained here. to provide electricity for the first time in rural Kenya.

Where next?

Patient capital has enormous potential to offer this rare combination: an impact on sustainable development and financial returns. When patient capital is deployed with these goals in mind, businesses and financial structures that strive for inclusive and sustainable growth have the starting point they need to thrive. Rather than being knocked down by difficult market dynamics, infrastructure companies operating in emerging markets are becoming agents to achieve the United Nations SDGs and the transition to net zero emissions.

And the genius of this approach is that it can be replicated. With the right regulatory frameworks in place and government officials with experience in driving renewable energy projects, private investors are more confident to engage. Over time, new projects emerge which may stand on their own in terms of sustainability of investments and ability to overcome obstacles to development. Patient capital is the key ingredient to this successful recipe; it can be used over and over again to fill gaps in the emerging market infrastructure space and beyond.

This Agenda blog is part of a series dedicated to mobilizing investment for clean energy in emerging and developing economies. Learn more about the related initiative, a project led by several stakeholders associated with the World Economic Forum with the aim of removing barriers, identifying solutions and enabling collaborative actions to significantly increase investment in clean energy in emerging markets and in development.


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West Africa: factoring offers an alternative to financing for SMEs – Central Bank of West African States https://bungeni.org/2021/07/14/west-africa-factoring-offers-an-alternative-to-financing-for-smes-central-bank-of-west-african-states/ Wed, 14 Jul 2021 11:37:17 +0000 https://bungeni.org/2021/07/14/west-africa-factoring-offers-an-alternative-to-financing-for-smes-central-bank-of-west-african-states/

Factoring, which is a financial management technique allowing a company to liquidate its receivables and recover liquidity, can be an alternative and complementary solution to financing, in particular for SMEs and SMIs the Governor of the Central Bank of the States of West Africa (Bceao), Tiémoko Meyliet Koné declared during the official opening, Tuesday July 13, of the series of joint BCEAO-AFREXIMBANK-FCI webinars on the theme “Factoring and financing of receivables in Africa” .

Meyliet Koné noted that factoring is an opportunity that has yet to be fully exploited by African businesses. He clarified that the African continent represents only 0.9% of the global turnover of the factoring activity in the last five years according to the FCI, mentioned. It is for this reason that the Central Bank has decided to deploy a strategy to promote factoring in the West African Economic and Monetary Union (UEMOA) zone.

A uniform law intended to regulate factoring operations

Through the series of webinars on factoring, the Central Bank reiterates its commitment to create an environment more conducive to the development and financing of economic activities and, more particularly, that of SMEs. To do this, the central bank has adopted a uniform law to regulate factoring operations with specified conditions.

According to Governor Koné, this law confirms in particular that in the WAEMU States, factoring is a credit operation and therefore falls under the exclusive competence of credit institutions. However, in order to reach a larger number of companies, the new law opened up the exercise of factoring activity to microfinance institutions, specifies Tiémoko Meyliet Koné. This according to Peter Mulroy, FCI General Secretary, said he is shaping a promising future for factoring in Africa against a backdrop of economic recovery with positive growth rates announced. For Kanayo Awanie, president of the Africa section of Afreximbank, factoring can help innovative SMEs to grow, support transformation and their development in Africa.