AfDB's $125 million Trade Finance Risk Participation Agreements.

Dear Africa Finance Review Reader,

In today’s This week in Africa Finance a roundup of interesting news, trends, and dealmaking:

• AfdB agrees two Trade finance risk participation agreements.

• Energy Entrepreneur Growth Fund nears its $120 million target

• Nigeria and Morocco sign new pipeline deal

• Ethopia’s new foreign ownership law

Africa-Focused Energy Entrepreneur Growth Fund( EEGF) edges toward $120million target with new $40 million investment.

DFC, the U.S. International Development Finance Corporation, has agreed to invest $40m in the Energy Entrepreneurs Growth Fund (EEGF), in a mix of junior and senior notes.

• The $120 million target Africa- focused Energy fund was created in 2019 by Shell Foundation and FMO the Dutch development bank structured as a bilateral private-sector international financial.

• It provides catalyst funding to early stage and growth stage Africa companies building innovative solution to energy access.

• The objective of the fund comes at a time when demand for renewable energy solution is growing from local companies , banks and consumers as an alternative to the persistent power problem across Africa and its economy impact.

• The fund recently made its first investment in  three distributed renewable energy (DRE) companies Yellow, Baobab+ and Redavia in totally USD 10 million.

AfDB approves $125 million Africa Trade Finance Risk Participation Agreement(RPA).

The Africa Development Bank has approved  a series of Trade Finance Risk Participation Agreements (RPA) with two banks to provide trade finance transactions to regional and local banks.

• The Risk Participation Agreement (RPA) agreement with the AfDB would allow for partner banks to share the default risk on a portfolio of trade finance transactions while giving regional and commercial banks partial coverage for their trade finance operations in Africa.

• The AfDB approved an unfunded $75 million trade finance Risk Participation Agreement facility for FirstRand Bank Limited (FRB), which will enhance FRB’s ability to underwrite trade finance transactions including those from state and low-income countries across Africa.

• The second approval is a $50 million RPA arrangement partnership is with Natixis France’s second largest banking group an international corporate, investment, asset management, insurance and financial services bank of Groupe BPCE.

Nigeria and Morocco to sign $25 billion gas pipeline agreement.

Nigerian National Petroleum Company Limited ( NNPCL) and Morocco’s National Office of Hydrocarbons and Mines have signed a $25 billion gas pipeline agreement that would connect Nigeria and Morocco. The memorandum of understanding (MOU) also has the Economic Community of West Africa States (ECOWAS) as a signatory.

• Nigeria possesses Africa’s largest proven gas reserves at about 200 trillion cubic feet, though untapped and constantly flared or re-injected into oil wells.

• The $25 billion projects would be constructed in phases with the initial phase taking three years and subsequent phases would take five years.

• The NNPCL recently evolved into a  commercial entity and is looking at expansion opportunities across the energy value chain such as building new gas-fueled power plants and the recent acquisition of the OVH Energy Marketing Ltd to increase its fuel retail footprint with 380 filling station.

Other News:

• Nigeria’s DMO Offers NGN 225 Billion Bonds for Subscription
  The Nigerian Debt Management Office, DMO has offered three Federal Government Bonds, which are valued at NGN 225 billion (approx. USD 518 million) for subscription.

• Ghana, 4 Other ECOWAS States get $250 Million EBID Support
  ECOWAS Bank for Investment and Development (EBID) has approved a total of $250 million for Ghana and four other member states to boost the oil & gas, energy, road infrastructure and agricultural sectors of West Africa

• MTN Cote d’lvoire agrees $75 Million deal with NuRAN in Cote d’Ivoire
  MTN Cote d’Ivoire has signed a $75 million five-year renewable contract with NuRAN Wireless the Canadian infrastructure supplier to expand its network coverage across rural areas.

• Ethiopia to allow for foreign acquisition of up to 30% of local banks

  As part of its plan to grow the economy and open it up to foreign investors, The Ethiopia Government has enacted new laws for foreign investors to acquire up to 30% of a local commercial bank through joint ventures.

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