Johannesburg, South Africa, May 29, 2023— To support the post-pandemic recovery and sustainable growth of sub-Saharan Africa's ecotourism sector, IFC today announced an investment in the Africa Conservation and Communities Tourism Fund (ACCT Fund).
IFC's $13 million investment will support ecotourism businesses in and around conservation areas in East and Southern Africa, with a focus on South Africa, Botswana, Kenya, Namibia, Tanzania, and Zambia. The ACCT Fund will invest in operators of safari camps, hotels, and lodges, helping them address liquidity shortages while recovering from the impact of the COVID-19 pandemic. The fund is also helping them refurbish, renovate, and expand their operations, especially where the businesses can achieve meaningful conservation and community development impact.
Impact investment and advisory group, ThirdWay Partners, and The Nature Conservancy, a global environmental non-profit organization, established the ACCT Fund, a structured debt vehicle, in 2021 in response to COVID-19-related challenges affecting the ecotourism sector.
Based on IFC estimates, the ACCT Fund is expected to contribute at least $530 million to economies where it invests through direct, indirect, and induced effects in the agriculture, retail, transportation, and recreational sectors. IFC expects the investment to also save about 21,200 full-time jobs.
"We are very grateful for IFC's support to this innovative and very important initiative," said Maarten Weehuizen, Managing Director of the ACCT Fund. "The ACCT Fund is an impact investment vehicle which balances financial goals with a clear conservation and community impact agenda."
"Tourism is critical to the long-term survival of conservation landscapes across the African continent, to the benefit of the people and the wildlife who depend on them," Weehuizen added. "Even prior to the COVID pandemic these areas were under significant pressure; tourism provides jobs in rural areas, funding for nature protection and its activities with guests in these landscapes significantly reduce the risk of poaching, deforestation and land conversion."
Ecotourism businesses are committed to protecting the environment and wildlife where they operate.
"As part of this innovative blended finance approach, IFC has partnered with the Nature Conservancy, a global environmental conservation organization, to support sustainable ecotourism and deliver impact to small tourism operators," said Sérgio Pimenta, IFC Vice President for Africa. "IFC's investment in the ACCT Fund will help financially affected ecotourism businesses to preserve jobs and contribute to the local economy. The partnership aligns with IFC's strategy to support the revival of domestic and regional tourism markets, and to use a blend of financing tools to support countries' development priorities."
With the financing from IFC and other investors, the fund has now reached final close with a total of $70 million raised. The ACCT Fund is structured using a blended finance approach with three tranches of capital: grant funding, junior equity, and senior equity funding. IFC will invest up to $13 million in the senior equity tranche. In addition to financing, IFC will also provide non-commercial risk mitigation and capacity building by supporting the development of climate guidelines that will contribute to setting standards for the sector and help operators improve their environmental performance by reducing energy and water use and improving waste management.
The ACCT Fund is strongly aligned with the national tourism strategies of the beneficiary countries, developed to support the recovery and resilience of their respective tourism sectors after the COVID-19 pandemic.
The ACCT Fund is aligned to the World Bank Group's goals of ending extreme poverty and promoting shared prosperity as well as the World Bank Group's Green Resilient and Inclusive Development (GRID) framework which aims to repair the structural damage caused by COVID-19, accelerate climate change mitigation and adaptation, and support a strong and sustainable recovery.
About ACCT Fund
The ACCT Fund was initially set-up to provide flexible bridge financing to conservation tourism businesses in Sub-Saharan Africa, severely hit by the COVID-19 pandemic and resulting travel restrictions, to support job retention, continued payment of fees to conservation areas, and other ongoing support for conservation and community development initiatives. As the sector recovers from the impact of the COVID-19 pandemic, the ACCT Fund now encompasses a more holistic focus on sustainable expansion of conservation tourism operations in high-value conservation areas in order to catalyze meaningful and incremental conservation and community impact.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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