This Week in Africa Finance-141123

Key Takeaways: Saudi Arabia to invest in African countries, Kenya to pay back $300m Eurobonds, Africa Credit Markets Brief and Notable deals of the week.

Investments

Saudi Arabia’s $ 700 billion Public Investment Fund plans investments in African countries.

Saudi Arabia recently hosted its Saudi-Arab-African Economic Conference in Riyadh fostering a new era of economic relationships with African countries as they explore commercial opportunities across the continent.

• Deals worth $533 million with multiple African countries were agreed with Saudi Arabia spanning sectors like energy, infrastructure development, and investments in healthcare.
• Mozambique also signed a $158 million financing agreement with the Gulf country to fund infrastructure projects including hospitals and dam projects.
• The agreements will be facilitated through the Kingdom’s Fund for Development which provides development, finance, trade and funding support for developing nations.
• Nigeria and Saudi Arabia have agreed on several investment and cooperation deals including providing financial support to sustain the government's foreign exchange reforms.

Saudi Arabia’s $700 billion sovereign wealth fund ‘The Public Investment Fund’ is expected to make “game-changing” investments across Africa. The continent needs many friends considering how highly leveraged most African countries are, as they explore economic reforms.

Bonds

Kenya to pay back $300 million of $2 billion Eurobond next month.

Kenya plans to pay back $300 million of its $2 billion Eurobond next month, due to high debt servicing costs.

• The Kenya government continues to work with its bilateral creditors and multilateral banks to reduce its debt repayments.
• Global money managers have raised concerns about the repayment plans and the reduction in Kenya’s foreign reserve.
• Fitch rating has affirmed Kenya’s sovereign’s rating at ‘B’ and revised the outlook to negative.

Kenya budgeted a projected 3.0% of GDP in FY24 for meeting its debt repayments but is expected to rise to 3.5 % due to currency depreciation, hence the proposed payback of $300 million of $2 billion Eurobonds due June 2024.

Private Credit

• Nigeria’s Bank of Industry has secured a credit line of EUR 100 million (approximately $106 million) from the French Development Agency AFD to provide green finance in Nigeria.

Bonds

• Kenya’s treasury has raised $441 million from selling its 17.9 per cent Infrastructure Bond. The popular bond was oversubscribed due to its attractive 6.5-year tax-free paper tenure and high-interest rate with the market-weighted.
• Fixed Income, ETFs and mutual funds listings on the Nigerian Exchange Limited have achieved $7.7 billion by the end of October due to increased interest by investors. Some of the prominent listings to drive the NGX equity value are FGN Bonds including Sukuk funds, VFD Group’s admission, and Nigeria Infrastructure Debt Fund(NIDF), others include state and corporate level issuances like Lagos state and Dangote Industries.
• Egyptian-based financial consulting company and a subsidiary of AUR Capital Financial Group, AUR Capital has completed the first EGP 255 Million Securitization Bond Issuance of the second programme for AUR for Securitization for micro, small, and medium enterprise (MSME) finance company Waseela.

Treasury Bills

• The Central Bank of Egypt has attracted impressive offers worth $836 million for its Euro-denominated treasury bills tenders.

Infrastructure Debt

• Leading fund manager Ninety One and Private Infrastructure Development Group (PIDG) Emerging Africa Infrastructure Fund (EAIF) have committed a $31 million debt facility to Paratus to finance the expansion of its fibre and data centre business over the next three years.

Deal Roundup

Fundraising

• Rwanda-based E-mobility startup BasiGo has secured a $1.5 million grant from the United States Agency for International Development to support a pilot program in Kigali.

M & A

• East Africa Growth Holding an investment firm owned by Africinvest Fund IV has acquired 10 per cent of equity in I&M Group from the UK development finance institution British International Investment.

Venture Capital

• The International Finance Corporation (IFC) has made an equity investment of up to $10 million in 4DX Ventures Management LLC managed funds 4DX Ventures III. The fund will invest in key sectors, fintech, eCommerce, edtech, logistics, and health tech sectors.
• South Africa’s Old Mutual-backed NEXT176 has invested approximately $1.4 million in JOBJACK an entry-level recruitment platform.
• Zambian provider of finance and training for farmers Good Nature Agro has secured a series A funding of $2.1 million led by Goodwell Investments and other investors like Global Partnerships and FINCA Ventures.

Private Equity

• Mid-cap and SME-focused Private Equity firm Mediterrania Capital Partners has secured a €15 million investment from British International Investment (BII) for its new MC IV fund which will be used to support mid-cap companies in North and Sub-Saharan Africa.

Infrastructure Finance

• The European Investment Bank and Moroccan’s Mohammed IV Investment Fund have agreed to a financial package of EUR 500 million as part of the Africa Investment Forum in Marrakech.

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