IFC, Africa CEO Forum Report Demonstrates
Funding Opportunities for Private Investors in Changing African Markets
Abidjan, Cote d’Ivoire, March 22, 2016— Africa remains a region with
enormous potential for private investors despite economic headwinds and
reduced liquidity that are creating challenges in managing risks and mobilizing
partners around investments, according to a report released today by IFC,
a member of the World Bank Group, in partnership with the Africa CEO Forum.
It concludes that even in difficult economic and risk environments, methods
of financing that better mitigate risk can be more widely adopted to fund
successful investments on a larger scale in Africa.
The report, New Horizons in African Finance: Reducing Risk and Mobilizing
Financing on New Scale, finds that enduring trends of rapid urbanization,
increasing stability, a young and growing population, expanding internet
connectivity, rising incomes, and shifting consumption patterns continue
to create an abundance of commercial opportunities across the continent.
Investment opportunities are strongest in sectors like clothing, communications,
energy, financial services, food, health, housing and transport. Meanwhile,
while Africa could absorb $90 billion in infrastructure spending each year,
only about half that amount is being invested. And the continent requires
$5-10 billion annually to adapt to climate change, including private investment.
Jingdong Hua, IFC Vice President and Treasurer, said, “We need to learn
from recent projects that are bringing together development finance institutions
with private commercial banks and other financiers, along with public and
donor support. Successful funding approaches need to be expanded upon to
reduce risk, mobilize funds, and build local capital markets to meet the
enormous opportunities presented by the ongoing transition in Africa.”
Projects highlighted in the report demonstrate how innovative structuring
and approaches can mitigate risks and crowd in institutional investors
to allow for a higher probability of success. The approaches include public-private
partnerships, co-financing, blended finance, local capital markets and
tailored solutions, and private equity.
Amir Ben Yahmed, Founder and President of the Africa CEO Forum, said, “Our
annual gathering of business and government leaders from around Africa
is demonstrating the continued interest in private investment on this continent.
Investors are looking for new approaches for dealing with changing market
conditions, and this report offers ideas and solutions for investors to
consider and act upon.”
Successful examples of recently financed projects come from across the
African region, with details of project structures and risk mitigation
tools highlighted in the report. They include the Azito 3 power project
in Cote d’Ivoire; an Ecobank Transnational SME lending program in West
African conflict-affected and fragile states; a Cargill-SIB partnership
to support agricultural coops, also in Cote d’Ivoire; A local currency
bond issue by Bayport Financial Services in Zambia; Bridge International
Academies’ funding for expansion in Kenya and other African countries;
Africa Improved Food Holdings’ nutritious food production project in Rwanda;
a large regional private equity fund raised by Helios Investment Partners;
and a restructuring and privatization of Eleme Petrochemicals in Nigeria.
Report in English: http://wrld.bg/ZEo7d
Rapport en français: http://wrld.bg/ZLQgr
About the Africa CEO Forum
The AFRICA CEO FORUM is one of the most important events in the African
business calendar, bringing together the most influential figureheads in
African and global finance and the CEOs of the continent’s biggest companies.
It allows participants to exchange their views and opinions on the issues
affecting the economic development of African companies, in a high-quality
setting that is ideal for conducting business meetings. Each year, the
AFRICA CEO FORUM is attended by banking, private equity and financial market
specialists, together with representatives of global financial institutions:
more than 800 attendees in total, including over 500 CEOs from all four
corners of the continent, 100 bankers and financiers, and 200 prominent
African and international figures.
IFC, a member of the World Bank Group, is the largest global development
institution focused on the private sector in emerging markets. Working
with more than 2,000 businesses worldwide, we use our capital, expertise,
and influence, to create opportunity where it’s needed most. In FY15,
our long-term investments in developing countries rose to nearly $18 billion,
helping the private sector play an essential role in the global effort
to end extreme poverty and boost shared prosperity. For more information,