IFC Hits Record Investment, Advisory Volume to Promote Development in Sub-Saharan Africa.

IFC
Investment commitments reach $5.3 billion, with projects targeting infrastructure, entrepreneurs, farmers and the health sector

Nairobi, Kenya, September 3, 2013—IFC, a member of the World Bank Group, today released details of its regional activities in Sub-Saharan Africa showing strong development impact through record volumes of investment and advisory services in for the year ending in June 2013. IFC committed a record $5.3 billion to new investments and carried out advisory services projects worth $65 million in Sub-Saharan Africa in its most recent fiscal year. IFC supported infrastructure, health, agribusiness and a range of activities in conflict affected states and helped Africa’s entrepreneurs gain access to finance.

IFC invested $3.5 billion from its own account, and mobilized $1.8 billion from other investors. In FY 2013, IFC’s supported projects that provided loans for 54,000 small and medium businesses, encouraged 13.7 million microfinance clients; and improved health and education for 360,000 people. IFC’s investments in wind power and other renewable energy reduced 667,000 tons of greenhouse gas emissions.

IFC Advisory Services spending reached $65 million during the most recent fiscal year. Projects were active in 42 countries, with 126 projects, valued at $217 million over the life of the projects. During fiscal year 2013, advisory services projects improved access to lighting and education services for 1.6 million people; generated 27,000 jobs; trained entrepreneurs and connected farmers to global markets. Three public-private partnership mandates were successfully closed, helping deliver health services to 360,000 people in Lesotho and Nigeria and power to 75,000 in Liberia.
IFC and the World Bank’s Investment Climate Advisory Services worked with governments in Sub-Saharan Africa to implement over 50 reforms that benefitted the private sector in 17 different countries. In Uganda, for example, licensing reforms led to private sector cost savings of $15.5 million. The 2013 Doing Business report found that of the 50 economies globally making the most improvement in business regulation for domestic firms since 2005, one-third were in Sub-Saharan Africa.

Oumar Seydi, IFC Director for Eastern and Southern Africa, said, “IFC’s steadily increasing investments and advisory services demonstrates our commitment to private sector development in Sub-Saharan Africa. IFC’s $5.3 billion in new investment and $65 million in advisory services projects have contributed to Africa’s economic growth by supporting entrepreneurs and farmers, improving infrastructure and basic services, and catalyzing business in countries recovering from conflict.”

Yolande Duhem, IFC Director for West and Central Africa, said, “By focusing on developing Africa’s private sector in key areas such as power generation, transport or agribusiness, we are playing an active role in stimulating sustainable economic growth and job creation in the region. We also believe in boosting regional markets in Africa and many of our investments aim to allow companies to grow beyond national boundaries.”

IFC’s agribusiness investments in Sub-Saharan Africa reached $600 million in the 2013 fiscal year. By investing in companies such as the Kenya Tea Development Agency and the Export Trading Group, IFC created economic opportunity for 263,000 farmers in sub Saharan Africa.

IFC funding for infrastructure projects in Africa reached $1.5 billion. IFC’s Infraventures division joined hands with private sector partners to develop wind power projects in Tanzania and Kenya. In West Africa, IFC invested aviation companies and mobilized funding for the Lomé port to expand the transportation network and improve trade infrastructure in the region.

Assisting in fragile and conflict situations is a strategic priority for IFC in Africa, and during the most recent fiscal year, IFC provided support in nearly all African economies emerging from conflict. IFC’s Conflict Affected States in Africa Program provided advisory support and funding to eight countries (Burundi, the Central African Republic, Cote d’Ivoire, the Democratic Republic of Congo, Guinea, Liberia, Sierra Leone, South Sudan). IFC’s programs in these countries helped strengthen the private sector foundation, and create opportunity and jobs. Last fiscal year, CASA received approval to expand to all 19 fragile and conflict affected states in Sub-Saharan Africa and will focus the first phase of the expansion on Mali, Somalia, and Zimbabwe.

Through innovative use of treasury operations, IFC expanded its capability to develop domestic capital markets and serve clients with local currency financing. In FY13, IFC provided more than $350 million in local currency loans to countries in Sub-Saharan Africa. IFC pioneered a Nigerian naira bond, raising $75 million in local currency for private sector investments. IFC is working with authorities in a number of countries including Ghana, Nigeria and Zambia on programs that will enable IFC to regularly issue local currency bonds.

IFC’s focus on encouraging investments between emerging markets was strengthened this year through new investments of nearly $400 million in so-called South-South investments. This included African cross-border investments, such Mali-based Azalai Hotels Group’s new hotel project in Cote d’Ivoire. In Nigeria, IFC financing supported major investments by two Indonesian companies: Indorama’s investment in Eleme Fertilizer and Wings Group’s Nigerian operations.

Africa-wide highlights for fiscal year 2012

• IFC’s Africa Micro, Small, and Medium Enterprise Program supports banks in increasing lending to small and medium enterprises. In fiscal year 2013, the program worked with 10 banks across Africa to facilitate loans of more than $736 million for smaller businesses. A key focus of the program is on women entrepreneurs. To date, IFC has helped 3,271 women entrepreneurs in Sub-Saharan Africa gain access to $27.5 million in financing.

• 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 2013, Lighting Africa had provided cleaner, better lighting and increased access to energy to 1.5 million people across the continent. For more information on Lighting Africa see http://www.lightingafrica.org

• ETC Group, a global agricultural company, received a $70 million loan from IFC to expand operations in Sub-Saharan Africa. IFC and ETC Group will work together to source products locally, connecting 36,000 African farmers to the group’s global markets. ETC will also build food processing plants and warehouses in Zambia, Tanzania, Nigeria and other countries in Africa; creating jobs and increasing food supply. The Mauritius-based ETC Group is one of Africa’s fastest expanding companies, with other operations in the Middle East and Asia.

• Launched last year, IFC and the MasterCard Foundation’s Partnership for Financial Inclusion is a $37.4 million initiative that aims to scale up sustainable microfinance and work with mobile financial services to reach 5.3 million low-income consumers in Sub-Saharan Africa. The program signed its first three advisory services clients in 2013: Access Bank in Tanzania, Urwego Opportunity Bank in Rwanda, and FINCA in the Democratic Republic of Congo. The program launched a mobile financial services market development program in Cote d’Ivoire.

• IFC’s Village Phone Program provides a starter kit with a fixed wireless phone, GSM antenna and solar charger to help village entrepreneurs set up communications services in rural areas where there are no network towers. To set up the service, village entrepreneurs can obtain financing from IFC’s micro finance and mobile network partners. This year, IFC developed partnerships with local mobile networks to train more than 13,000 village phone operators in Madagascar, Chad and Malawi. In Nigeria, IFC and partners trained 20,000 micro-entrepreneurs, and helped 9,000 village operators start their businesses, which should help connect 5 million Nigerians to better phone services.

• IFC’s credit bureau and collateral registries program promotes credit information sharing and reporting systems in Africa to make access to finance easier for individuals and small businesses. To do this, we work closely with central banks, public and private banks, other lenders and credit providers, and consumers. In 2013, IFC worked with the governments of Malawi and Rwanda to enact laws to support credit reporting. IFC and its partners also set up a credit reference databank in Tanzania, upgraded the credit reporting system in Ethiopia, and developed Africa’s first web-based collateral registry in Ghana.

• IFC’s Conflict Affected States in Africa Initiative increased spending by almost a quarter, rising to $11.1 million. CASA’s achievements this year included expanding operations to Guinea and hosting a conference with the Financial Times on business in conflict affected countries. Government ministers, private sector leaders and civil society organizations attended the conference in Nairobi to discuss how to invest in fragile countries. Since 2009, CASA’s work has facilitated loans for micro, small and medium enterprises; built capacities of over 300 entities, trained 7,0000 individuals and enacted 49 investment climate reforms.

An independent evaluation in 2013 concluded that no other agency is addressing private sector development in fragile states as comprehensively as IFC’s CASA program. CASA is supported by donors Ireland, the Netherlands, and Norway. For more information see http://www.ifc.org/casa (http://www.ifc.org/casa)

• The Efficient Securities Markets Institutional Development Africa Program, a joint program by IFC, World Bank and the Swedish International Development Cooperation Agency helps develop securities markets to finance infrastructure, housing, microfinance and other projects. In fiscal year 2013, the program worked on revising pension fund investment guidelines in Kenya, launched a Kenyan Bond markets association, and implemented rules to improve bond issuance in Nigeria.

• IFC’s Business Edge program, which provides management training for entrepreneurs, was offered in Uganda, South Sudan, Rwanda, Kenya and Burundi. During fiscal year 2013, Business Edge trained over 6,000 entrepreneurs, of whom 40 percent were women.

• IFC Advisory Services programs in 2013 were supported by the governments of Austria, Canada, Denmark, France, Japan, Luxembourg, Netherlands , Norway, Portugal, Sweden, Switzerland and the United Kingdom, as well as the Bill & Melinda Gates Foundation, Development Bank of Austria, European Commission, and The MasterCard Foundation.

Eastern and Southern Africa Highlights

Infrastructure

• IFC invested in wind power projects in East Africa, to enhance power supply and promote climate-friendly energy. In Kenya, IFC and Belgian company, Electrawinds will jointly develop the 90 megawatt Mpeketoni Wind Farm in Lamu county. In Tanzania, IFC partnered with Aldwych and Six Telecoms to develop the 100 megawatt Singida wind farm, to diversify the country’s electricity away from hydropower and costly fuel imports. IFC will contribute $4 million early stage capital to the farm, and later, provide $71 million total equity along with Aldwych and Six Telecoms. Both the Lamu and Tanzania wind farms were funded through IFC’s Infraventures fund, which develops infrastructure projects in emerging markets.

• IFC committed $546 million in new financing to 23 projects in Southern Africa. New commitments in South Africa included $401 million in projects supporting a range of sectors, including renewable energy, agribusiness, and financial markets. IFC invested ZAR 1.25 billion (approximately $143 million) in direct financing, and coordinated approximately $264 million in parallel loans, to support the construction of two landmark Abengoa concentrated solar power projects in the Northern Cape province. IFC provide $73 million to support the Amakhala wind power project in the Eastern Cape province. Through investments in Hans Merenksy Holdings, an industry-leading avocado grower and plantation forest company, and Country Bird, a poultry foods company, IFC supported the development of South African agribusiness.

• IFC loaned $50 million loan to Kenya Power Lighting Company (Kenya Power) to help the national power distributor expand its network to reach over half a million new households by 2014. IFC’s resource efficiency team will also provide the company with advisory services to help reduce power losses.

IFC invested $10 million equity in Uganda’s power distributor, Umeme Ltd’s public offering to help increase the quality of power in Uganda. Umeme aims to expand its current consumer base of 500,000, and will work on improving power efficiency and reducing losses.

• The Oesterreichische Entwicklungsbank (OeEB), the Development Bank of Austria entered a partnership with IFC to increase sustainable energy investment in Sub-Saharan Africa, starting with Kenya, Tanzania, Uganda and Rwanda. OeEB agreed to contribute €2 million to support project development, capacity building and assistance to financial institutions under the Africa Sustainable Energy Facility.

Health
• IFC invested $4 million equity investment in AAR Health Care Holdings, one of Africa’s leading health care providers. AAR Healthcare will expand its operations and acquire new hospitals in Nairobi, Kampala and Dar es Salaam to serve more patients. IFC’s investment should enable AAR Healthcare to serve an estimated 600,000 additional outpatients each year by 2018. The company is one of the few integrated primary and secondary health care providers in the region.

• In the Kingdom of Lesotho, IFC’s Public Private Partnerships division advised the government on developing a system to manage health care waste. IFC assisted the Ministry of Health in setting up a competitive bidding process, which resulted in the choice of two suppliers. This public private partnership will help ease the burden of waste management at 168 healthcare facilities in Lesotho.

Agribusiness
• The Kenya Tea Development Agency (KTDA) received a $12 million loan from IFC to build a 200,000-square-foot warehouse to store tea and other commodities in Mombasa. The new warehouse will increase KTDA’s capacity to store and export tea from its factories across the country. KTDA sources its tea leaves from 560,000 smallholder farmers, who are also shareholders in the company, therefore, any profitable business venture ultimately benefits them.

• IFC loaned $25 million to support poultry producer, Country Bird’s expansion in Southern Africa. Over the next three years, Country Bird will use IFC’s funding to increase production and operations in Zambia, Botswana and South Africa; providing more affordable proteins in these countries. Country Bird’s expansion will also create jobs in the rural areas where the company operates, and increase revenues for the 21,500 maize farmers employed through the company’s supply chain.

Financial Markets
• IFC invested $5 million equity in Gulf African Bank to support corporate finance and lending to small and medium businesses in East Africa. One of Kenya’s only two Islamic banks; Gulf African Bank marks IFC’s first engagement with an Islamic finance institution in Sub- Saharan Africa. The bank will use IFC’s financing to increase Sharia-compliant finance for retail customers, women entrepreneurs and small businesses.
• Housing Finance Company of Kenya partnered with IFC and the Government of Canada to increase access to housing finance and promote environmentally-friendly housing in the country. IFC provided $20 million financing to the Housing Finance Company, including $4 million from the IFC-Canada Climate Change Program. Green houses are in limited supply in Kenya, with buyers generally unaware of the benefits of purchasing such a home. Housing Finance Company will apply IFC’s green building standards to test the viability of this market on a commercial scale.

• IFC loaned $3 million in Tanzanian shillings to FINCA Tanzania, a microfinance group, to expand lending to women, youth and rural areas in the country. FINCA has over 72,000 borrowers in Tanzania, 80 percent of whom are women. IFC’s local currency loan to FINCA was provided through the shilling/US dollar swap market arranged with Barclays Bank, NBC Bank, and the Bank of Tanzania.
• IFC invested S$25 equity in the South African Workforce Housing Fund, a private equity fund that aims to raise S$300 million investment for affordable housing projects in South Africa Botswana, Mauritius, Namibia, Zambia and Ghana. The Fund will provide the money needed to help develop budget housing units for students, middle class and low-income families.

Water and Sanitation

• The Bill & Melinda Gates Foundation, IFC and the World Bank launched a Selling Sanitation program, which will work with regional manufacturing firms to deliver low-cost sanitation products in East Africa, starting in Kenya. The program will support firms in designing new products, promote sanitation to consumers currently without access, especially in rural areas. The initiative will work closely with the Kenyan Ministry of Public Health and Sanitation.

West and Central Africa

Infrastructure
• IFC arranged the financing of the expansion of the Azito thermal power plant in Côte d’Ivoire. In partnership with PROPARCO and the West Africa Development Bank, IFC put together a $350 million debt package, provided by seven financial institutions. IFC itself is providing a $125 million loan. The expansion of the power plant will allow it to generate 50% more power with zero extra emission and using no additional gas (the steam generated by the exhaust heat will be used to power a steam turbine). The additional power– around 1,000 GWh per annum – will improve access to electricity and support economic growth in Côte d’Ivoire and the sub-region.

• IFC put together a €225 million debt package for Togo’s Lome Container Terminal, SA (LCT).The consortium of financiers included the African Development Bank, Germany’s DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, FMO of The Netherlands, the OPEC Fund for International Development (OFID), and France’s PROPARCO. The major infrastructure project is Togo’s largest-ever private investment project and will play a critical role in reducing costs and trade impediments and encouraging regional integration. LCT will use the funding to develop a new transshipment container terminal within the Port of Lomé. The completed terminal will have an annual handling capacity of the equivalent of 2.2 million twenty foot container units. It will enable shipping lines to deploy the largest container vessels in West and Central Africa.

• IFC’s $80 million loan will enable Takoradi International Company to expand its T2 power plant, increasing the electricity supply in Ghana. T2 will use waste heat recovery technology for the expansion, which means the plant will be able to generate 50 percent more electricity without increasing greenhouse gas emissions. The increased efficiency will lower the cost of electricity generated by T2. Alongside the loan, IFC will provide a $15 million loan to TICO from the IFC-Canada Climate Change Program.

• IFC will provide a loan of €30 million to the Agency for Air Navigation Safety in Africa and Madagascar to finance part of its renovation plan, including the acquisition of new equipment and the refurbishment of buildings. These investments will allow ASECNA to continue improving the quality of its services and to maintain its perfect safety track record. ASECNA operates in 17 West and Central African countries and Madagascar. It plans to purchase new airport navigation equipment, energy and communication infrastructure, and will renovate its control tower buildings in most of these locations.

Agribusiness
• IFC put together a total financing package amounting to $350 million for the Nigeria-based Indorama Eleme Fertilizer Company, to support the expansion of the country’s largest fertilizer production facility. The investment will contribute to improved farm yields and agricultural productivity, which are critical to Nigeria’s long-term food security. The total project cost is $1.2 billion, of which $800 million are financed by lenders. IFC is investing $150 million, and mobilized another $225 through a syndicated B-loan from the Bank of India and through parallel loans from other development finance institutions.

Manufacturing and Services
• IFC is providing a €6 million loan to Compagnie Hôtelière de la Lagune S.A., the Ivoirian company owned by the Mali-based Azalai Hotels Group. The loan will support the construction of a new business hotel that will contribute to the revitalization of commercial infrastructure in Abidjan. The project is expected to create 160 direct jobs, at a time when unemployment is high in the country following years of conflict.

Financial Services
• IFC committed a new investment in LAPO Microfinance Bank, Nigeria’s largest microfinance institution, to help it expand its services. LAPO is active serving poor and low-income borrowers, particularly rural women without access to other financing sources due to lack of collateral or ability to meet other requirements. Today LAPO has a total of 700,000 clients and aims to reach 5 million within five years.

• IFC and the Africa Capitalization Fund, a private equity fund managed by IFC Asset Management Company, a wholly owned subsidiary of IFC, will together provide $70 million in convertible loans to Diamond Bank. The financing will support growth and access to finance for smaller businesses in Nigeria by allowing Diamond Bank to expand its lending program and ability to offer financial services to underserved market segments, including micro, small and medium enterprises and agricultural firms.

Treasury
• IFC issued a Nigeria local currency bond totaling NGN 12 billion – equivalent to approximately $75 million – to support domestic capital markets and increase access to local currency finance by IFC clients. The issue, called the “Naija” bond, is IFC’s first naira-denominated bond, It is also the first placement by a nonresident issuer in Nigeria’s domestic capital markets.

Access to finance
• IFC and The Coca-Cola Company launched a $100 million, three-year joint initiative to provide access to finance for thousands of women entrepreneurs in Africa and other emerging markets. IFC will work through its network of local and regional baking institutions to provide financing and business skills training to small and medium enterprises that are owned or operated by women entrepreneurs across the Coca-Cola value chain, starting with an IFC investment in Access Bank, Nigeria.

• IFC and the MasterCard Foundation convened key financial industry players to build further momentum for mobile financial services in Côte d’Ivoire. The workshop marked the beginning of the implementation of a four year program by IFC and the MasterCard Foundation to contribute to the development and expansion of mobile financial services in the country.

• IFC launched the Africa Leasing Facility program in Guinea, which aims to build the foundation for leasing as an alternative financing tool for small and medium enterprises. Leasing is an innovative solution for small companies that usually do not have the necessary guarantees to access regular credit options in order to purchase the equipment necessary to their expansion.

Investment Climate
• IFC supported the creation of a One Stop Shop in Côte d’Ivoire. This led to business registration costs going down from $3,300 to $2,657 and the time needed from 32 to 4 days. Similarly, property registration fees were reduced from 10 percent to 7 percent and time to obtain a commercial construction permit is down from 475 to 290 days. Working hand in hand with the World Bank, which supported the creation of a Commercial Court, IFC also helped reduce the cost of handling commercial disputes by providing inputs in the new regulation. IFC is looking at improving the legal status of women in business and has recently helped revisit a fiscal law to allow married women the same fiscal advantages as men.

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