Finance

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.”

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.”

Since inception, AIIM has raised more than US$4bn over eight funds and executed more than 70 transactions in target pan-African markets. (Image source: Adobe Stock)

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.

Bank One provides a wide range of banking products and services to its clients through a geographic footprint spread across the island of Mauritius. (Image source: Bank One)

According to Bank One, a joint venture between CIEL Finance Limited and I&M Group PLC, Mauritius could become a conduit for project funding into sub-Saharan Africa by forming a league with financial institutions in the Middle East

The Bank has adopted a long-term strategy to expand its footprint and position itself as ‘Africa’s preferred gateway’. In order to do so, and unlock the massive deal flows on the ground to sustain economic growth in the region – which it stated are “definitely” there – the organisation met with key financial sector players in the Gulf.

“At Bank One, we were recently privileged to meet with key players from the Gulf region and explore the financial landscape in the Middle East through an expert eye,” remarked Thavin Audit, deputy head of corporate and investment banking at Bank One. “This has helped the Bank One leadership team form a nuanced view of what this region means to us, and we are keen to impart insights to other banks or financial institutions who would like to explore this region. Indeed, we view collaboration among various financial sector stakeholders as key to realising the potential of the Mauritius-Middle East partnership.”

From the insights gleaned at the meetings, bank representatives believe the time is now ripe for Mauritius to explore deeper affiliations with financial institutions across the Middle East to best leverage opportunities and support sub-Saharan Africa.

“While Middle Eastern banks have traditionally been engaged in offering Sharia-compliant products, the excess liquidity such banks are currently encountering has substantial implications for their involvement in syndication and trade finance deals. Indeed, Emirati banks have lately been beating Wall Street at its own game, with a 10-year US$3.25 billion loan having been syndicated by regional banks to finance an impactful education sector deal for Dubai’s GEMS. When a consortium led by Canadian fund manager Brookfield was looking for funding for one of the largest private school operators on the planet, it was four Gulf banks who confidently stepped in to help” added Audit.

With Africa home to 11 out of the world’s 20 fastest growing economies in 2024 (according to the African Development Bank), the continent is fertile ground for syndication deals. Meanwhile, the Middle East is the world’s fastest-growing regional market in terms of banking and capital market sectors. At a broader level, reports abound that Gulf banks presently have more liquidity in comparison with many of their foreign peers mainly due to the higher interest rates in Europe and further afield. As such, they face a pressing necessity to match funding to projects and transactions that constitute economic and geographic diversification. However, Emirati banks looking at emerging economies such as those in Africa need to partner with other banks that have the competence, skill, access, and knowledge of the hopeful continent.

African industries in focus

According to Bank One, there is a concentration of deals primarily focused on the oil and gas sector, as well as wider infrastructure.

In the case of the former, oil and gas has immense potential on the continent with reserves nearly equivalent to the US. Once a discovery is made, however, the biggest challenge for African governments and commercial partners is finding sources of finance to develop projects.

In the latter, the pace of infrastructure development in Africa is beginning to increase based on rising deals in transport, energy and telecommunications. As such, there is a huge demand for funding in those areas with AfDB estimating between US$130bn and US$170bn will be required each year to meet infrastructure needs.

Mauritius to take a leading role

This promising environment is a formidable opportunity and Bank One identified a number of developments which is playing into this space.

First, in February 2024, the UAE was removed from the grey list after two years of being on the FATF’s radar, signifying its commitment to combatting money laundering and terrorist financing. This development is likely to boost investor confidence in the UAE's regulatory framework, and it is expected that this move will be accompanied by greater foreign capital inflows and reduced compliance costs and costs of borrowing. Bank One has welcomed this development and has seen Middle Eastern banks confidently looking to channel funding into Africa.

Second, there are promising talks of key DFIs joining forces with financial institutions in the Middle East. Recently, the AfDB, European Investment Bank (EIB), and the OPEC Fund for International Development (OFID) announced support for the African Capitalization Fund, a new private equity fund to be created by the IFC’s Asset Management Company (AMC). The Fund will seek to capitalise on systemically important private sector commercial banking institutions in Africa to spur economic recovery and job creation. The Abu Dhabi Fund for Development (ADFD) also announced that a commitment to the fund is under due consideration.

Finally, systemic efforts are being made to stimulate investments from the Middle East to Africa. With a Comprehensive Economic Partnership Agreement being signed between Mauritius and Dubai which was announced in December 2023 as the first of its kind between the Emirates and an African country. Bank One is keen to explore the full potential of the agreement which is expected to pave the way for increased trade, investment, and private-sector cooperation between the countries.