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Africa’s impact investing landscape in 2021

The 4th IIF’s convening marks another milestone in the promotion of impact investing on the African continent. Just like yesterday’s program, the past convening programmes attracted people that mattered in the impact investing ecosystem in Africa.

Impact investing witnessed a rebound in 2021, with a number of deals reported by the African Private Equity and Venture Capital Association (AVCA).

Last March, the International Finance Corporation (IFC) announced it invested 20 million euros in Bolt, a global mobility platform to help expand access to mobility and delivery services in the underserved urban areas in Africa.

In another development, the IFC and IFC Financial Institutions Growth Fund invested in Adumo, to help boost digital payment solutions in Africa. The investment in Adumo will make digital payment systems more affordable and accessible to smaller businesses in Africa.

Further, Proparco invested 50 million euros in the first fund for green bonds issued by companies in emerging markets in Africa, Asia and Latin America.

“The green bond market is today still mainly an active market for investors and issuers in developed countries, but rarely in emerging countries, despite the huge financing needs in these countries and the demand for green assets from investors in OECD countries”, AVCA said.

In June, the G7 Development Finance Institutions and multilateral partners announced they would invest over $80 billion in African businesses in the next five years to support sustainable economy recovery and growth in Africa.

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In September, Argentil’s clean energy portfolio company successfully completed the closing of the First Modular Gas System Limited (FMGSL) worth about $16 million.

“The new investment in FMGSL is from the Africa Infra Plus Fund (AIPF), a N40.5 billion Special Situation Infrastructure Equity Fund, with headroom to raise up to N200 billion under its current fundraise programmes, and the first naira based Infra fund that can invest in debt or equity in Nigerian infrastructure projects. The Fund targets sectors such as power, telecommunication, transportation and basic infrastructure in Nigeria, with opportunistic oversight of West African countries” AVCA said.

Burkina Faso was in the news in October when Africa REN, a pioneer in clean infrastructures in Africa, launched the Kodeni Solar power plant in Bobo-Dioulasso, Burkina Faso. The solar power plant is expected to generate 73,000 MWh to provide affordable energy to 115,000 homes in that country.

In November, Opportunity International and Oikocredit announced they would invest $100 million to promote education in low income countries of Ghana, Kenya, Nigeria, Senegal and Uganda.

Both organisations are expected to target financial institutions providing financial intermediation to vulnerable populations and to give support to the development of the education sector.

Also in November, CDC Group and Norfund announced they would raise $500 million in the next three to five years to support sustainable forestry sector in sub-Saharan African countries. The partnership was formed because Africa controls 17 percent of the world’s forests, as well as 20 percent of all tropical forests across the world.

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