IFC's record investment in Sub Saharan Africa has a strong climate component
IFC announced high development impact results in Sub-Saharan Africa in fiscal year 2012 from both its advisory services projects and investments, which reached a record $4 billion. IFC supported infrastructure, health, education, and agribusiness projects in the region, and strengthened smaller businesses and Africa’s capital markets. Climate-friendly investments included the following:
IFC's Public Private Partnership in infrastructure business line had a landmark year, signing agreements with African governments that mandate it to structure transactions that can attract private sector sponsors and investment. Key sectors included health, tourism and renewable energy, providing a strong indicator of both the level and range of interest by governments to create more investment opportunities.
Lighting Africa, a joint IFC and World Bank program, is mobilizing the private sector to provide safe, affordable, and modern off-grid lighting to communities in Africa that are not connected to the grid and rely on kerosene lamps or other expensive, polluting alternatives. By the end of fiscal year 2012, Lighting Africa had provided cleaner, better lighting and increased access to energy to 3.8 million consumers across the continent. For more information on Lighting Africa see www.lightingafrica.org.
IFC invested $200 million in the new Global SME Finance Facility, the first global platform of its kind to blend donor funding with funding from international development institutions to expand lending to small businesses in emerging markets. The United Kingdom’s Department for International Development (DFID) is the facility’s first donor, with an investment of $63 million. The facility will support high-impact projects with higher risk profiles, such as in conflict-affected areas of Africa and South Asia, women-owned businesses, and those engaged in sustainable-energy and climate-change activities. It is expected to fund about 600,000 small businesses over its 10-year lifetime. The facility will target projects in Ethiopia, Ghana, Kenya, Liberia, Malawi, Mozambique, Nigeria, Rwanda, Sierra Leone, South Sudan, Tanzania, Uganda and Zambia.
Supported by an IFC equity investment of $2 million, in February 2012, Premier Gas launched ‘Pima,” a one-kilogram Liquid Petroleum Gas (LPG) cylinder, which allows for partial refills starting at 50 Kenyan Shillings ($0.6). The LPG stoves will provide a cleaner energy alternative to Kenyan households that rely on kerosene as a cooking fuel, despite health hazards.
IFC and the European Investment Bank launched a new €60 million facility to expand access to finance for sustainable energy through local financial institutions in Kenya, Tanzania, Uganda and Rwanda. The facility will be supported by the identification of bankable sustainable energy projects and capacity building for local service providers.
IFC, with the support of the Government of Canada, committed a sustainable energy finance loan in Sub-Saharan Africa with Sasfin Bank. The transaction will support expanded lending by Sasfin for renewable energy and energy efficiency projects boosting efficient use of energy resources and reduction of greenhouse gas emissions. IFC is to provide up to $10 million financing to the bank, including up to $2.3 million from the IFC-Canada Climate Change Program. The long term funding for renewable energy and energy efficiency projects will help the South African companies become more resource efficient and competitive. These benefits were also made possible by the government of Canada’s contribution, which helped make the financing package viable.
IFC signed an agreement with the Principal Officers Association of South Africa to work on the integration of environmental, social, and corporate governance issues in investment decisions. The project will provide a consistent framework and set of tools for retirement funds to comply with the new Regulation 28 of South Africa’s Pension Funds Act. The regulation is pioneering on a global level in that it requires pension funds to actively consider sustainability issues in their investment decisions. This is reinforced by a number of national and international policy initiatives such as the Code for Responsible Investing in South Africa and the UN-backed Principles for Responsible Investment.
For a larger list of highlighted IFC projects in Sub Saharan Africa, please see our press release.