Johannesburg, August 31, 2010
—IFC, a member of the World Bank Group, today 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.
During the fiscal year that ended in June 2010, IFC increased its investments in Sub-Saharan Africa to $2.4 billion for its own account from $1.8 billion a year earlier. It was the first time IFC's annual investments surpassed $2.0 billion in the region. IFC mobilized an additional $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, said, “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."
In support of increased development impact in the world’s poorest countries, IFC dedicated nearly $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 $68 million went toward lessening the effects of climate change on the continent.
IFC managed 168 regional Advisory Services projects in Africa, supporting increased access to finance, sustainable business practices, and improved investment climates. Seventy percent of the $248 million in Advisory Services projects under management were dedicated to the region's poorest countries, also known as IDA countries.
IFC Asset Management Company, during its first year of operation, supported $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.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit
www.ifc.org
.
IFC FY10 Highlights
Regional
· The $2.4 billion in IFC regional investments for its own account reached
31 countries during FY10
, up from $1.8 billion in 30 countries the previous year. Recipient countries include: 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.
· 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 201 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 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
.
West Africa
· 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
HeidelbergCement AG
to make an equity investment of up to $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 $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.
· In February 2010, IFC, the Office National de l’Electricité, known as
O.N.E., and Comasel de St Louis
, signed a subscription agreement related to the first rural electrification concession of
Senegal
. This is IFC’s first rural electrification project and aims by 2013 to connect almost 20,000 new households in 298 villages through a mix of grid connections and individual solar kits. The project benefited from an innovative grant mechanism provided by the
World Bank
and was carried out in partnership with
Public-Private Infrastructure Advisory Facility
, whose recommendations were incorporated into the final design of the project.
· IFC made an equity investment of 575 million West African francs ($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.
· IFS 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.
· In September 2009, IFC announced the signing of a 25-year concession agreement for the
South Wharf Container Terminal
between the government of
Benin
and the
Groupement Bolloré
that promises to increase trade between landlocked countries in West Africa and the rest of the world. IFC Advisory Services advised the government of Benin on the bidding process for the concession at the port of Cotonou, in partnership with
DevCo
, a multidonor affiliate program that incorporates the
Private Infrastructure Development Group
, supported by the
U.K.’s Department for International Development
; the
Dutch Ministry of Foreign Affairs
; the
Swedish International Development Agency
; and the
Austrian Development Agency
. The
United States’ Millennium Challenge Corporation
provided additional funding for the construction of the quay wall behind which the container terminal will be constructed.
· 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
.
Central Africa
· In November 2009, IFC became the first non-local financial institution to issue a
Central African franc-denominated (XAF) bond
. Proceeds from the XAF 20 billion ($43 million equivalent), five-year tenor bond will support lending to small and medium enterprises in six countries in central Africa and help strengthen capital markets in the region. IFC used the proceeds to provide financing in support of mobile phone operator
Millicom in Chad
and the operations of
Ecobank in Cameroon, Central African Republic, and Chad
.
· In May 2010, IFC announced a $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
.
East Africa
· IFC entered a risk participation agreement with
Export Trading Group
, one of Africa’s largest integrated agricultural supply chain operators, under which it will fully assume the risk associated with $40 million of $120 million in syndicated loans from
Standard Chartered Bank
to ETG. The
OPEC Fund for International Development
will also assume risk for $20 million of the loans. ETG will use the funds to finance the trade of agricultural commodities in several African countries, including
Tanzania, Zambia, Kenya, Malawi and Uganda, as well as in India.
· IFC provided financing to the
Aga Khan Fund for Economic Development
through its Aviation Services division to assist in maintaining the critical aviation infrastructure in support of economic development and to provide regional airline services in Africa. IFC provided a $25 million loan to AKFED for on-lending to its three airlines:
Air Burkina, Air Mali and Air Uganda
, to allow AKFED to consolidate the Division’s airline and aviation activities and optimize routing, synergies and overall effectiveness across the group’s airline operations.
· IFC and its partners helped transform
Rwanda
’s leasing industry, supporting its market growth from modest beginnings to one worth more than $30 million today. Launched in 2007,
IFC’s Rwanda Competitive and Enterprise Development Project
helped grow Rwanda’s leasing sector and trained more than 1,500 small businesses across the country about the mechanics and benefits of leasing. The IFC program was carried out in partnership with the government of Rwanda,
the Netherlands
,
Denmark
,
Luxembourg
, and the
African Development Bank
. The initiative is being further developed by the
Rwanda Leasing Association
.
· IFC provided financing and advisory services t
o Spencon International
to help the Kenya-based engineering, procurement, and construction company expand its commercial and public infrastructure projects across Eastern and Southern Africa. IFC is loaning Spencon $12 million, which the company will use for working capital and to fund infrastructure projects of its subsidiaries operating in
Kenya, Tanzania, Uganda, and Zambia
. Spencon, one of East Africa’s largest construction companies, will also explore opportunities in new African markets.
· IFC signed its
first direct investment with a Chinese company
operating in Sub-Saharan Africa to support the continent’s sustainable development. The loan is part of the World Bank Group’s initiative to encourage China-Africa cooperation by backing Chinese companies’ investments in Africa. IFC’s $10 million loan will help finance a 20-story office and retail building complex in the central business district of Dar es Salaam, Tanzania. The project is a partnership between
Mwalimu Nyerere Foundation
, a nongovernmental organization honoring the legacy of Tanzania’s first president, Julius K. Nyerere, which owns the land and will occupy some of the offices, and
China’s CRJE Estate Ltd.,
a fully owned subsidiary of China Railway Jianchang Engineering Company Ltd.
· IFC invested $7.5 million in the
Fanisi Venture Capital Fund
, which will focus on investing in startups and small and medium enterprises in
Kenya, Rwanda, Uganda, and Tanzania
, where job creation is largely driven by smaller enterprises. The fund, established with the assistance of Norwegian Investment Fund for Developing Countries and incorporated in Luxembourg, has raised $40 million in commitments and expects to reach its goal of $55 million within the next 12 months. Norfund is an investor in the fund and a shareholder in the fund’s management company, which is majority-owned by Amani Capital Ltd, based in Nairobi.
·
Rwanda
aggressively pursued reforms of business regulation with support from the
Investment Climate Advisory Services of the World Bank Group
, the
Netherlands
, and the
United Kingdom’s Department for International Development.
Rwanda jumped 76 places to reach number 67 in the World Bank’s 2010 global ranking of the ease of doing business, making it the world’s fastest reforming country.
· IFC agreed to invest 6.2 million Canadian dollars in
Helio Resources Corporation
to support a gold exploration project that is expected to provide jobs and government revenues to
Tanzania
once the mine is developed. IFC’s investment will be used by Helio, a Canadian-based mining company focused on gold exploration, for the advancement of the Saza Makongolosi Gold project in southwest Tanzania and for general corporate working capital. IFC also will work with the company to ensure that exploration and any subsequent mine development is carried out in an environmentally and socially sustainable manner.
Southern Africa
·
Lesotho
opened the first of three state-of-the-art health clinics last fiscal year, thanks to a public-private partnership agreement facilitated by IFC. The
Likotsi medical clinic
, located on the outskirts of Lesotho’s capital, Maseru, is the result of a landmark 2008 partnership between Lesotho’s government and the
Tsepong consortium
, led by health care group
Netcare
. IFC acted as lead transaction advisor on the PPP agreement, which calls for the opening of two more clinics and a new 390-bed hospital. The project was developed in partnership with the
Development Bank of Southern Africa
,
the Netherlands
, and the
Swedish International Development Agency
.
· IFC and the World Bank Group, in partnership with the
European Union
, last fiscal year launched a major initiative to boost private sector agriculture output in
Southern Africa
to help meet the region’s growing demand for food and to support economic growth. IFC, through
its Africa Agriculture Finance Program
, is seeking to provide financing and advice to help overcome constraints hurting the agriculture sector, which accounts for about a quarter of Africa’s GDP and employs close to 70 percent of the economically active population.
· In June 2010, IFC joined forces with leading
South African
health care provider
Life Healthcare
Group Limited to help encourage investment between emerging market countries and help transfer South Africa’s world class hospital management expertise. IFC acquired a five percent equity stake in Life Healthcare for $93 million and the joint financing of a special purpose vehicle (subsidiary company) to be created by Life Healthcare to support its international expansion.
