The International Corporation (IFC), a member of the World Bank Group, has announced a record investment volume in Sub-Saharan Africa for its 2010 fiscal year, underscoring its commitment to the region's private sector development, especially to supporting growth in the lowest income countries and those affected by conflict including Liberia.
During the fiscal year that ended in June 2010, IFC says it increased its investments in Sub-Saharan Africa to US$2.4 billion for its own account from US$1.8 billion a year earlier. It was the first time IFC's annual investments surpassed US$2.0 billion in the region. IFC says it was successful in mobilizing an additional US$1.1 billion from other investors and approved 40 new Advisory Services projects during FY10.
Thierry Tanoh, IFC vice president for Latin America and the Caribbean, Sub-Saharan Africa, and Western Europe, noted “Private businesses that are delivering services and creating employment and other opportunities are changing lives for the better in Africa. Through another record year, IFC is demonstrating the enormous private investment potential in Africa and the continent's readiness to attract more."
According to Mr. Tanoh, IFC invested the US$2.4 billion in 31 countries as part of its regional investments for its own account. Up from US$1.8 billion in 30 countries the previous year, he named the recipient countries as Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Cote d'Ivoire, Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, Sao Tome and Principe, South Africa, Tanzania, Togo, Uganda, and Zambia.
In support of increased development impact in the world's poorest countries, IFC reports that it has dedicated nearly US$400 million in financing in Africa to projects that strengthen micro-small and medium enterprises.
Following the global financial crisis, IFC provided significant support for trade finance to domestic and international banks. More than US$68 million went toward lessening the effects of climate change on the continent.
According to FY 10 reports released August 31, 2010, IFC says it managed 168 regional Advisory Services projects in Africa, supporting increased access to finance, sustainable business practices, and improved investment climates. Seventy percent of theUS$248 million in Advisory Services projects under management were dedicated to the region's poorest countries, also known as IDA countries.
The report says that the IFC Asset Management Company (AMC), during its first year of operation, supported US$140 million in Sub-Sahara African investments in manufacturing and financial services, investing alongside IFC. IFC AMC, a wholly-owned subsidiary of IFC, invests third-party capital, enabling outside investors to benefit from IFC's expertise in achieving strong equity returns and positive development impact in countries where it invests.
IFC mobilized additional investments through loan syndications and through a Global Trade Liquidity Program.
IFC's strategy in Africa emphasizes three key areas: improving the investment climate; enhancing support to micro-small and medium enterprises; and developing new projects in priority sectors, such as building infrastructure, advancing health care, developing agribusiness, and promoting the recovery of countries affected by conflict.
Highlights of Some Investment Breakdowns
IFC, in partnership with the European Commission and the Netherlands' Ministry of Foreign Affairs, launched a program to help farmers and others in developing countries more easily access insurance for natural disasters to protect themselves from weather-related risks. The Global Index Insurance Facility is an index-based insurance scheme that insures against certain catastrophic events, depending on their severity. For example, insurance will be paid out in the event of a wind storm of a certain category, or an earthquake registering a certain magnitude on the Richter scale.
IFC and the World Bank's Lighting Africa Program attracted over 600 participants and 50 exhibitors to a major event in May 2010 that was a major milestone for the off-grid lighting industry in Africa, showcasing a number of innovative lighting products and accelerating the establishment of a sector association. Lighting Africa is supporting private sector efforts to develop the market for modern off-grid lighting technologies to bring safe, inexpensive lighting products to millions. Lighting Africa is being implemented in partnership with: The Africa Renewable Energy and Access Grants Program, the Asia Sustainable and Alternative Energy Program, the Energy Sector Management Assistance Program, the Global Environment Facility, Good Energies Inc., Luxembourg, Norway, the Public-Private Infrastructure Advisory Facility, and the Renewable Energy & Energy Efficiency Partnership.
In June 2010, IFC extended a 14 million euro loan to GRIMAS to help the group upgrade operations in Mali and expand to Cote d'Ivoire and Senegal, increasing business opportunities in West Africa and promoting regional economic integration. GRIMAS, one of the principal players in the agribusiness sector in Mali, will use the loan to increase capacity and enhance operational, environmental, and social standards.
In May 2010, IFC signed an agreement with Heidelberg Cement AG to make an equity investment of up to US$110 million to help the company improve energy efficiency and increase the capacity of its operations in Benin, Gabon, Ghana, Liberia, Sierra Leone, Tanzania, and Togo. It was followed by IFC Asset Management Company's first investment by the IFC African, Latin American and Caribbean Fund, committing up to US$35 million. Heidelberg's capital expenditure plans will contribute to the development of the local infrastructure and housing sectors, improve the supply and production standards of locally produced cement, and create employment opportunities.
IFC made an equity investment of 575 million West African francs (US$1.2 million) to help Microcred Senegal expand activities in February 2010. IFC Advisory Services will support MicroCred Sénégal through a grant to help them finance their expansion and improve capacity. In the next three years, IFC expects MicroCred Sénégal to create 400 direct jobs and serve at least 50,000 microfinance clients, of which half will be women.
IFC provided $100 million in financing from its own account and $150 million in syndicated loans to Helios Towers Nigeria to support the increase of its network to 2,000 shared tower communication sites nationwide and spread the benefits of improved communications across Nigeria. Participants in the syndicated loan are African Development Bank, FMO of the Netherlands, Germany's DEG, Proparco of France, Nigeria's First City Monument Bank, Cordiant Capital, the Emerging African Infrastructure Fund, and Nedbank of South Africa.
IFC and IFC Asset Management Company in June 2010 signed a $175 million series of investments in Ecobank Transnational Incorporated and its group subsidiaries that will help strengthen the financial sector across several African countries and support the region's recovery from the impact of the recent turmoil in global financial markets. In addition to providing finance for ETI's Togo-based holding company, the transactions supported subsidiaries in Kenya, Liberia, and in Central Africa.
In May 2010, IFC announced a US$12.5 million equity investment in the Central Africa Small and Medium Enterprise Fund, which will make equity and equity-related investments in smaller businesses across the central African region. It will initially focus on companies in the Central African Republic. The fund, managed by XSML, a social investment fund manager based in the Netherlands and Cenainvest, an SME fund manager based in Cameroon, aims to mobilize a total of $25 million from other development finance institutions and the private sector. IFC also made a $13.5 million commitment to a similar Ventures West Africa Fund to meet the needs of smaller enterprises in Liberia and Sierra Leone, amongst many other African countries in South, East and Central regions.