This Week in Africa Finance

This Week in Africa Finance
Photo by Desola Lanre-Ologun / Unsplash

Plus Africa's Eurobond Return, Kenya's new $941 million IMF loan, Emerging Africa Infrastructure Fund(EAIF)'s $294 million fundraising, Access Bank's new acquisition in Uganda, UNDP's $1 billion Africa Innovation Fund and other notable deals.


Funding

UNDP Makes Ambitious Bet on African Startups with $1 Billion Innovation Fund

The United Nations Development Programme (UNDP) and eight African countries took bold steps at last week's Davos to support the continent's growing startups with the launch of Timbuktoo, a Pan-African initiative that will invest $1 billion over 10 years into startups across Africa. 

Why is this important: Africa's startup ecosystem is quite vibrant as they continue to challenge existing business models and industries stuck in old ways. Even with the progress made and the rise of unicorns the continent's startup community remains underfunded. According to the UNDP, Africa's share of global startup funding is only 0.2 per cent, with 89 per cent of venture funding being foreign capital. Over 60 per cent of the funding is concentrated in fintech and Kenya, Nigeria, Egypt and South Africa are the highest recipients of the funding.

The bottom line: The Timbuktoo initiative backed by catalytic financing will encourage confidence by de-risking private investments in the early stage of the African venture funding cycle. Furthermore, it would increase the domestic capital needed to grow the ecosystem considering the great ideas and solutions coming from African founders and startups but being hindered by lack of funding.


Sovereign Debt

Nigeria Targets $1.5 Billion Eurobond Return

Nigeria is looking to join the Ivory Coast in returning to the Eurobond markets as it seeks to raise $1.5 billion according to Bloomberg. Read More

Ivory Coast to Issue First Sub-Saharan Africa Eurobond in Two Years

Ivory Coast the world's largest cocoa producer will sell new international debt to raise funds on the Eurobond market next week. Read More


Sovereign Debt

Kenya Secures $941 Million IMF Loan

The International Monetary Fund (IMF) has granted Kenya a new loan of more than $941 million to help support the East African nation through its liquidity issues. Read More


Trade Finance

Africa Finance Corporation Issues $250 million Sharia-law Compliant Trade Loan to Egypt.

Africa Finance Corporation(AFC) the private sector-led infrastructure investment solution provider and International Islamic Trade Finance Corporation (ITFC) are to provide a $250 million Sharia-compliant trade loan facility to Egypt. Read More


Industry-Specific Deals.
Private Credit
  • Watu Credit the Uganda-based provider of asset finance for two-wheelers and three-wheelers has raised an initial five-year term facility of $15 million from the Africa Credit Opportunities Fund managed by Gateway Partners.

Venture Capital
  • The African Development Bank (AfDB) has agreed to invest $10.50 million in Seedstars Africa Ventures S.L.P. a venture capital fund to enable it to invest in innovative African businesses with strong growth potential. The investment includes $7 million from its ordinary resources and $3.5 million from the European Union Boost Africa programme.

Infrastructure
  • The International Finance Corporation (IFC) has announced a $30 million equity investment in the African Infrastructure Investment Fund 4 the Africa-focused infrastructure private equity fund managed by African Infrastructure Investment Managers (AIIM), a subsidiary of the Old Mutual Group.
  • The Emerging Africa Infrastructure Fund(EAIF) has raised $294 million of the fund's $500 million target by 2025. The recent debt facilities received include €75 million commitment from Allianz Global Investors (AllianzGI), a $75 million multicurrency revolving credit facility with sustainability-linked features and a $25 million sustainability-linked term debt facility from Standard Bank and €60 million loan from KfW, the German state-owned development bank.
  • Kenya is looking to raise $311 million (Sh50 billion) through Public Private Partnerships (PPPs) to fund key projects in power generation and transmission, roads, water and aviation.

Fundraising
  • DEG German development finance institution has made a $20 million equity investment in the Adenia Capital V fund the fifth fund managed by Adenia Partners.

M & A
  • Convergence Partners a leading private equity firm, has acquired South Africa-based data centre operator Datacentrix, as it deploys its $300 million tech-focused fund to invest in companies offering value-added services to key industries across Africa.
  • Nigeria's Access Bank Plc will acquire a majority equity stake in Ugandan-based Finance Trust Bank Limited (FTB).
  • Ukheshe, a South African-based digital payment solutions provider has acquired EFT Corporation (EFTCorp), a payment solutions provider, from Loita Transaction Services (LXS) with funding support provided by Development Partners International (DPI). 
  • General Atlantic the leading global growth equity investor has acquired Actis the sustainable infrastructure investor.

Healthcare
  • Ezdehar Management, the Egypt-based private equity firm, has acquired a minority stake in Yodawy the integrated health insurance provider through its Ezdehar Mid-Cap Fund II.

Financial Services
  • Access Bank has completed its acquisition of African Banking Corporation Zambia Limited, trading as Atlas Mara Zambia (Atlas Mara), after obtaining all requisite regulatory approvals.
  • Canza the Nigerian-based Fintech startup has raised $2.3million in funding for the development of its DeFi products 

Sustainability
  • KOKO the Kenyan-based climate-tech startup has raised an undisclosed amount of funding from Rand Merchant Bank (RMB).

Week Ahead
  • Jan 24 South Africa inflation figures for December 2023 and interest rate decision
  • Jan 25 Zambia inflation figures for January & trade data for December 2023
  • Jan. 25 South Africa interest-rate decision,
  • Jan. 26 Eswatini interest-rate decision

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