This Week in Africa Finance

Plus AfDB's new $2 Billion three-year Social Global Benchmark Bond, Growth Investment Partners(GIP)'s new investment, FMO's $10 million investment, Ivory Coast's successful return to the international debt market and other notable deals and market activities.

Eurobond

Ivory Coast Achieves $8 Billion in Eurobond Sale.

Ivory Coast, the world’s biggest cocoa producer received over $8 billion in combined demand for a sustainable bond due in 2033 and a conventional offering maturing in 2037, The country issued $1.1 billion via the sustainable bond and $1.5 billion for the conventional debt,

Why is this important: Considered the economic powerhouse of Francophone West Africa, Ivory Coast's successful bond issuance is its first dollar bond in almost seven years and sub-Saharan Africa in two years. The dollar issuance makes it eligible for other key bond index inclusion as part of international fundraising.

The bottom line: The bond issue has been closely watched by other African countries to gauge the international response to the continent's international debt markets. The scale of its acceptance will provide the comfort needed by these countries as they implement economic reforms to stimulate growth. In Ivory Coast's case, it continues to grow its economy with a GDP growth of 6.90 per cent in the third quarter of 2023.

ESG

AfDB Launches $2 Billion Three-Year Social Global Benchmark Bond.

The African Development Bank (AfDB) has launched and priced a $2 billion three-year Social Global Benchmark, its first social bond issued under its new sustainable bond framework established in September 2023.

Why is this important: The bond will enhance the bank's existing green and social bond programme, by facilitating the issuance of more innovative green bonds, social bonds and sustainability bonds. The issuance was successful with strong interest from high-quality investors, central banks, and official institutions as indicated in the growing order book of over USD 3.5 billion. The bank has also successfully secured the tightest pricing among Multilateral Development Banks (MDBs) both versus swaps and US Treasuries.

The Bottom line: This is quite promising as African entrepreneurs continue to grow the continent's ESG credibility through innovative and climate-friendly projects by leveraging its natural energy to boost economic growth and ensure social improvements. The fundamental issue has always been the funding needed for these projects which provides a credible rate of return for investors. The AfDB Social Global Framework will go a long to address that funding gap.

Eurobond

Ivory Coast Achieves $8 Billion in Eurobond Sale.

Ivory Coast, the world’s biggest cocoa producer received over $8 billion in combined demand for a sustainable bond due in 2033 and a conventional offering maturing in 2037, The country issued $1.1 billion via the sustainable bond and $1.5 billion for the conventional debt,

Why is this important: Considered the economic powerhouse of Francophone West Africa, Ivory Coast's successful bond issuance is its first dollar bond in almost seven years and sub-Saharan Africa in two years. The dollar issuance makes it eligible for other key bond index inclusion as part of international fundraising.

The bottom line: The bond issue has been closely watched by other African countries to gauge the international response to the continent's international debt markets. The scale of its acceptance will provide the comfort needed by these countries as they implement economic reforms to stimulate growth. In Ivory Coast's case, it continues to grow its economy with a GDP growth of 6.90 per cent in the third quarter of 2023.

M & A

• Access Pension Limited a subsidiary of Access Holdings has received a ‘no-objection’ from the National Pension Commission and the approval of the Federal Competition and Consumer Protection Commission for the acquisition of a majority equity stake in ARM Pensions Managers (PFA) Limited (‘ARM’).  
• National Cement Holdings Ltd, part of the Devki Group and one of the largest cement manufacturers in East Africa, has completed the acquisition of Rwanda-based CIMERWA Plc at $85 million, a further $60 million will be invested in Cimerwa to revamp and scale its operations.
• Old Mutual Limited the pan-African investment, savings, insurance, and banking group has sold its complete stake in UAP Insurance Tanzania, the short-term insurance provider. The acquisition is pending regulatory approval.
• Fortis Green Renewables a US-based renewable energy investment firm has acquired a significant minority stake in Rwanda-based Rwaza Hydropower, a 2.6MW operational run-of-river hydropower plant.

Venture Capital

• Shamba Pride the Kenyan agri-tech startup has raised $3.7 million in pre-Series A debt and equity funding to help it expand its operations. EDFI Agrifi will provide a long-term loan of US$2 million, while Seedstars Africa Ventures has committed an additional US$1.7 million in equity.
• Egypt-based DXwand a specialist in LLM, knowledge mining and omnichannel conversational AI has secured a US$4 million Series A funding led by Shorooq Partners and Algebra Ventures and existing investor the Dubai Future District Fund. The new investment will be used to accelerate research and development efforts and increase its regional presence.

Fundraising

• The United States African Development Foundation (USADF) and the Malawi Government have extended their partnership with up to $7.5 million co-funding commitment over the next five years to promote the development of Malawian smallholder agricultural producers, cooperatives, farmer groups, small-scale agribusinesses, and small and medium-sized enterprises.
• Growth Investment Partners(GIP) Ghana created by UK’s development finance institution British International Investment (BII), the provider of long-term and flexible capital in local currency targeted at SMEs, has invested in E-Services Africa Limited (eSAL) a Ghanaian Business Process Outsourcing (BPO) company. The funding will enable eSAL to upgrade to new technology and acquire new infrastructure to serve a global client base.

More Bonds

• Kenya's retail investors invested an additional $ 1.4 million into government securities over the last six months, indicating a growing interest in the higher interest rates on offer for the bonds.

Infrastructure

• A.P. Moller Capital the infrastructure-focused fund manager has welcomed new investors to its Emerging Markets Infrastructure Fund II, including the German development financier DEG, the International Finance Corporation (IFC), and the Asian Infrastructure Investment Bank (AIIB).
• FMO the Dutch development bank has invested $10 million in the SIMA Commercial & Industrial Solar Green Bond fund.
• The Emerging Africa Infrastructure Fund (EAIF), a Private Infrastructure Development Group (PIDG) has committed $39 million to a $125 million receivables-backed bond issued by securitisation vehicle Fonds Commun de Titrisation de Créance (FCTC), to support Sonatel’s expansion, modernisation and digital transformation plan in Senegal.

Healthcare

• Yodawy the Egyptian digital healthcare startup, has raised US$10 million in extra funding from Ezdehar 2 mid-cap fund managed by Ezdehar investment fund management company.

Agriculture

• Swedfund the Development Finance Institution of the Swedish state decided to support the agri-fintech company Apollo Agriculture in Kenya through a loan of $5 million.

Other Market Snippets

• The International Monetary Fund (IMF) is in Cairo to discuss a $3 billion loan for the two reviews of Egypt's reform program from the Fund.
• Ethiopia is to issue licences for foreign investment banks to operate in the country, a major step ahead of the expected launch of a securities exchange,
• Mozambique approved DP World's $2 Billion 25-year extension till 2058 to run Maputo port in Mozambique. Shipping-container capacity is expected to quadruple by 2058

Week Ahead

• Jan 29: Ghana interest-rate decision,
• Jan 31:  Mozambique interest-rate decision
• Jan 31:  Kenya and Uganda inflation for January 2024
• Feb 1:  South African manufacturing PMI report 

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