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Tuesday, June 18, 2024

Africa Funding Discussion board launches funding roundtable sequence to deal with undertaking bankability challenges

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The Africa Funding Discussion board (AIF) has launched a sequence of funding roundtables aimed toward tackling the continent’s undertaking bankability challenges. The roundtables, dubbed the “Bankability Sequence”, will carry collectively key gamers in undertaking growth in Africa to debate the alternatives and challenges in bringing infrastructure tasks to monetary shut. 

The inaugural occasion, held on the sidelines of the annual conferences of the African Improvement Financial institution’s (AfDB) in Nairobi, featured insights from AIF, Cygnum Capital, and the Sustainable Power Fund for Africa (SEFA), with Aly-Khan Jamal of the Boston Consulting Group steering the discussions.

In her opening remarks, Chinelo Anohu, senior director of AIF, underscored the dedication of the Africa Funding Discussion board’s Bankability Sequence to propel the bankability of tasks throughout the continent.

“By showcasing revolutionary approaches and fostering collaboration amongst key stakeholders, we goal to redirect international capital flows in the direction of Africa’s transformative tasks. Collectively, we will unlock the continent’s huge potential and drive sustainable financial development.”

She additional highlighted the AfDB’s Transition Assist Facility (TSF), which supplies extra concessional sources to boost non-public sector development in eligible African Improvement Fund (ADF) international locations, comprising the 37 most susceptible African international locations to fragility and battle. TSF funds are directed at focused capability constructing and technical help to shorten the time it takes to carry tasks to shut.

She famous that 10 of 37 boardroom offers offered on the AIF’s Market Days 2023 benefited from the TSF. The AIF’s annual Market Days occasion brings collectively transaction sponsors, traders and governments in Board Rooms to maneuver offers towards bankability.

“AIF is partnering with TSF within the transition area the place bankable tasks are most wanted,” she stated.

Leveraging the AIF ecosystem

Chris Kandie, govt director at Cygnum Capital, mentioned undertaking preparation and growth in Africa from a non-public sector viewpoint. Key challenges that he cited embrace restricted human useful resource capability, a dearth in well-structured offers that hinders the stream of personal capital, and coordination points amongst undertaking preparation stakeholders.

He famous that Cygnum Capital, which focuses on frontier markets, is exclusive as a result of it performs a twin function as each an investor and transaction advisor.

“We sit on each side of the desk relying on which facet of our enterprise is concerned within the undertaking,” he stated. “On the funding banking facet, we work as transaction advisors and assist to mobilise funding for undertaking preparation, whereas on the asset administration facet we get to see issues from the traders’ perspective, and examine tasks with the essential eye of an investor.”

Kandie famous that Cygumn’s asset administration arm oversees some $805m deployed throughout three funds, including that the agency has leveraged the AIF ecosystem to establish viable alternatives throughout the continent.

Cygnum Capital performed a central function in advising the Kenya Inexpensive Inexperienced Housing Fund (KGAHF), which efficiently achieved its first shut of $84.5m in July 2021. The fund attracted investments from native pension funds, growth finance establishments, and the European Funding Financial institution.

Kandie elaborated the strategy the agency took to realize monetary shut for the undertaking in an expeditious vogue, regardless of the inevitable delays occasioned by the Covid-19 pandemic. “From a structural perspective, we determined to have a concessional layer of fairness to draw and crowd in business fairness,” he stated, citing the instrumental help of FSD Africa – a “monetary sector deepening” operation funded by the UK authorities – on this availing the concessional funds.

An intensive toolbox of economic devices

Joao Duarte Cunha, head of SEFA – a $500m multi-donor fund managed by the AfDB – highlighted a number of tasks which were offered to traders by the Africa Funding Discussion board, together with the Facility for Power Inclusion (FEI), which was Africa’s first devoted off-grid, mini-grid, and small Unbiased Energy Producer (IPP) debt fund. A $1m grant supplied by SEFA in the end helped to lift over $400m globally throughout two completely different funds.

Cunha famous that SEFA has “an intensive toolbox of economic devices” to assist carry tasks to monetary shut speedily. He provided the instance of convertible grants. “We provide convertible grants for undertaking preparation in circumstances the place particular tasks have excessive prospects of reaching shut inside an affordable time.”

By way of SEFA’s scope, Cunha famous that SEFA helps interventions throughout three strategic priorities: inexperienced baseload, inexperienced mini-grid and power effectivity. To reinforce the inexperienced baseload, SEFA is specializing in rising the penetration of renewable power in energy methods, with a powerful deal with energy system stability, and delivering alternate options to fossil-fuel baseload era choices, he defined. This contains supporting power tasks in photo voltaic, hydro and geothermal. “We’re additionally accelerating electrical energy entry to underserved populations by clear power mini-grid options,” he stated.

The occasion drew about 100 attendees together with African Improvement Financial institution vp for personal sector, infrastructure and industrialisation Solomon Quaynor and the group president’s particular consultant for the AIF, Yacine Fal.

Representatives of the platform’s founding companions, Deutsche Financial institution, African Threat Capability Group, Japan Worldwide Cooperation Company, KfW (the German state-owned funding and growth financial institution), Multilateral Funding Assure Company, IFC, Swiss Re Group, and the Confederation of Chinese language Buyers, amongst others, have been additionally current.


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