Category: CD Group Companies

GuarantCo, part of the Private Infrastructure Development Group (PIDG), and SBM Bank Kenya, a local commercial bank, provided a KES 1.6 billion (c. USD 15 million) financing solution to Bboxx Kenya, a next generation utility company, to invest in affordable solar home systems for 470,000 Kenyans. GuarantCo supported the transaction with a KES 1.2 billion (USD 11.25 million) partial credit guarantee of 75 percent against the loan facility.

Historically investments on the African continent in the off-grid SHS sector have been made in hard currency, which can expose companies to significant exchange risks. Through mobilising a local bank, the guarantee will match the currency of funding needs with operations and collections and so contribute to the overall sustainability of the business. This is expected to have wider market benefits through demonstrating a model for domestic banks and increase their appetite to lend to the sector.

The funds will be used by Bboxx Kenya to purchase new inventory over the next two years including 89,600 solar home systems and essential appliances such as fridges and phones. These are expected to serve 470,000 people, 80 percent of whom are based in rural areas and the majority of whom currently use torches and non-traditional fuel, such as wood and kerosene, as their main source of lighting.

Kenya’s electrification rate is estimated at around 70 percent though there is some disparity between urban (90 percent) and rural areas (60 percent). The Kenya National Electrification Strategy, developed in 2018, demonstrates the Government of Kenya’s commitment to scaling up off-grid electrification with ambitions to establish two million new connections by 2022, notably through solar home systems and mini-grids.

The transaction will contribute to United Nation’s Sustainable Development Goals: Affordable and Clean Energy (SDG 7) and Climate Mitigation (SDG 13) through increasing access to affordable and reliable energy.

At present, Bboxx Kenya employees 350 workers, 40 percent of which are women, and the company intends to maintain this proportion of female employment as the workforce as it grows.

The transaction will enable the creation of a further hundred new long-term jobs with efforts to provide opportunities for women in the process.

Emily Bushby, COO/CFO of GuarantCo, said: “We are delighted to partner with Bboxx and SBM Bank to make this solar home systems transaction happen to the benefit of people in Kenya.  This is our sixth deal and first off-grid solar project in Kenya.  We are proud to support the Kenyan government in its ambition to grow its off-grid capabilities and improve affordable, clean energy access to local people while involving the private sector and provide local currency infrastructure project financing which is at the core of GuarantCo’s business.”

Mansoor Hamayun, CEO of Bboxx, said: “We are very pleased to partner with GuarantCo and SBM Bank to accelerate access to clean, reliable, and affordable energy to hundreds of thousands of Kenyans. This fund marks a big milestone in our industry’s history. This transaction shows what is possible to achieve when forging partnerships between different stakeholders to mobilise private capital to the energy sector. This transaction is the largest single loan raised by Bboxx Kenya, it will enable us to unlock potential and transform even more lives for the better through energy access in Kenya. It is a positive step in the right direction in securing more funds to help tackle the global energy access gap and make progress towards meeting UN Sustainable Development Goal 7 – energy for all.”

Jeff Vanden Berghe, MD of Bboxx Kenya, said: “Over the past 12 months we have been working closely with GuarantCo and SBM to bring this partnership to fruition. This marks Bboxx Kenya’s first local currency transaction, which allows us to bring more renewable, low-cost and safe energy to an extra 470,000 Kenyans. The partnership will also help us expand our services to more remote regions of the country, working with the Government of Kenya, through its KOSAP program, to bring power to underserved communities.”

Jotham Mutoka, Deputy Chief Executive Officer of SBM Bank Kenya, said: “SBM Bank is elated to spur the growth of the energy sector in Kenya through partnerships with like-minded entities such as Bboxx and GuarantCo. Through this transaction, I envision school children being able to access electricity at home to complete their schoolwork when in the past they were in darkness, this will uplift the social-economic status of the entire home leading to a smarter tomorrow.”

About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia, Sweden and the Netherlands, through the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development www.guarantco.com

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 171 infrastructure projects to financial close which provided an estimated 217 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany and the IFC www.pidg.org

About Bboxx Kenya

Bboxx is a next generation utility, transforming lives and unlocking potential through access to energy. Bboxx manufactures, distributes and finances decentralised solar powered systems in developing countries. It is scaling through forging strategic partnerships and its innovative technology Bboxx Pulse®, a comprehensive management platform using IoT technology. Through affordable, reliable, and clean utility provision, Bboxx is bringing people into the digital economy, creating new markets, and enabling economic development in off-grid communities and those living without a reliable grid connection. The company is positively impacting the lives of more than 2 million people with its products and services in over 27 markets, directly contributing to 11 of the 17 United Nations Sustainable Development Goals. In Kenya, Bboxx has positively impacted the lives of 570,000 Kenyans. www.bboxx.com

About SBM Bank Kenya

SBM Bank Kenya is a leading and trusted financial institution with an international footprint, headquartered in Mauritius and positioned to offer an unprecedented banking experience in Kenya to retail, SME and corporate clients. The bank started its operations in Kenya in May 2017 and currently has a branch network of 40 branches countrywide. This is complemented by customer touch points such as a round the clock contact centre, ATMs, mobile banking, online banking and extensive agency banking services. Additionally, SBM Bank Kenya operates as an Authorised Depository and as an Authorised Securities Dealer following a license issuance by the Capital Markets Authority. SBM Bank Kenya is regulated by the Central Bank of Kenya.

SBM Bank Kenya is a subsidiary of SBM Group Holdings, Mauritius. The Group is mainly owned by the Government of Mauritius and associated entities.

GuarantCo, part of the Private Infrastructure Development Group (PIDG), and Bank Alfalah have provided Shams Power with a PKR 2 billion (c. USD 11.3 million) financing solution to support the construction of approximately 21 MW small rooftop and ground mounted solar plants at commercial, industrial and institutional (e.g. university, hospital) sites across Pakistan to reach grid connected users.

In addition to GuarantCo’s existing guarantee of PKR 1.5 billion (c. USD 9 million), covering 75 percent of the loan facilities, the company has committed an additional guarantee of PKR 1.5 billion to support Shams Power’s debt raising in 2022 to construct a further 21 MW of distributed solar plants.

Against GuarantCo’s guarantee facility, Bank Alfalah will provide the PKR 2 billion first phase of financing in the form of a 10-year term loan that benefits from the Renewable Energy Refinancing Scheme set up by the State Bank of Pakistan.

The project will improve Pakistan’s power sector efficiency by producing clean and green power near the point of usage, thus reducing wastage and line losses associated with the national grid and by stabilising the grid at peak times.  Shams Power helps to reduce carbon emissions and has a positive impact on mitigating climate change through the provision of clean, sustainable solar power.

This transaction has the potential to transform the rooftop solar market in Pakistan by demonstrating the ability for rooftop solar providers to access debt funding locally; this will allow for developers to scale up to unlock more solar potential. The transaction also builds the capacity of energy regulators and the State Bank of Pakistan (SBP), allowing them to create a supportive and practical regulatory and financial framework whilst also building the capacity of banks who are new to this asset class. Shams is also committed to continue the provision of training and potential employment opportunities to female engineers as the company grows.

Shams Power offers a Build Operate Own and Transfer (BOOT) model to commercial, industrial and institutional customers. Being the pioneer in Power Purchase Agreement (PPA) based clean energy generation and BOOT model in Pakistan, they faced challenges in raising funds for further expansion and therefore GuarantCo’s support was required. Their business model is to build and operate small solar power generation units at commercial, industrial and institutional sites, serving the local private sector, including SMEs, through its own complete solutions under long-term (10-20 years) PPA or equipment sales on deferred basis agreements.

Business and institutional users will benefit from lower electricity costs through the rooftop systems installed without incurring any upfront capital expenditure. The proposed solution also increases users’ electricity reliability and reduces their reliance on back-up diesel generators. Given climate considerations and business continuity reasons, Shams Power’s solution represents an efficient alternative to existing solutions. In addition, the transaction will lead to long-term job creation in the project value chain. It is expected that there will be over 60 local permanent jobs created by Shams Power.

Emily Bushby, Interim CEO of GuarantCo, said:

“The innovative financing mechanism for this transaction has the potential to drive significant growth in the rooftop solar market in Pakistan. The model is scalable, replicable and the need for guarantee support will hopefully reduce over time. This transaction supports Pakistan’s commitments to decarbonise its power sector and to meet GuarantCo’s mission of mobilising new sources of local currency financing. Through our transaction with Shams Power, we will support Pakistan in its ambition to provide economical, clean and consistent energy supply to businesses and gradually shift towards renewable energy supply and improve energy access, involving the private sector and local currency financing.”

Omar Malik, CEO of Shams Power, said:

“We are delighted to have successfully completed this landmark transaction. This will enable Shams Power to expand our portfolio of high-quality projects across the C&I sector and extend our renewable energy footprint. These projects will enable our clients to reduce their carbon emissions, meet sustainability targets, and reduce costs of production. They will also generate employment during construction. GuarantCo’s credit guarantee and Bank Alfalah’s tremendous support were critical in making this possible.”

Atif Bajwa, CEO of Bank Alfalah, said:

“While Bank Alfalah is at the forefront of facilitating our clients’ energy needs, this is a first of its kind distributed solar model of such magnitude for the Bank. Successful execution of this model will not only set up a framework for future distributed solar projects to follow but will also pave way for numerous businesses to achieve significant energy savings with minimal capital expenditure. In line with Bank Alfalah’s Green Banking policy, Bank Alfalah remains committed towards renewable energy financing and is proud to play its part in reducing carbon footprint across Pakistan and combating climate change. We would also like to applaud State Bank of Pakistan’s Financing Scheme for Renewable Energy which is encouraging investments and taking us a step closer to achieving the government’s clean energy vision.”

Asif Elahi, Partner of Capital Resource, said

“We are thrilled to have had the opportunity of supporting Shams Power in achieving their financing objectives. There has been exponential growth in roof top solar power in regional countries with us lagging behind. The credit enhancement and financing support from GuarantCo and Bank Alfalah teams will go a long way in helping bridge this gap allowing Shams Power to become the leading distributed solar company in Pakistan.”

• ILX’s investment strategy identifies high-impact, SDG-focused private-sector loans in emerging markets, arranged by the leading international development banks

• Dutch Ministry of Foreign Affairs and German and UK development agencies supported the creation of ILX during its development phase since 2017

• The incubation support is in line with the donor’s ambitions to mobilise private capital for development finance and the UN Sustainable Development Goals (“SDGs”)

• ILX will co-invest with the leading Multilateral Development Banks (MDBs) and other Development Finance Institutions (DFIs), enabling them to mobilise institutional capital in support of the SDGs and their Climate Finance commitments

• Dutch pension provider APG invests USD 750 million on behalf of its pension fund clients ABP and bpfBOUW, thus strengthening its financial commitment to the UN Sustainable Development Goals (SDGs) in emerging markets

17 January 2022, AMSTERDAM – Cardano Development and ILX Management B.V. (“ILX”), the SDG-focused, emerging market private credit asset-manager, are pleased to announce the first closing of ILX Fund I. Dutch pension provider APG, on behalf of its pension fund clients ABP and bpf BOUW, invests USD 750 mln. This new private credit fund invests in private-sector loans arranged by the leading Multilateral Development Banks and other DFIs, such as the ADB, AfDB, EBRD, IDB-Invest, IFC and FMO.

ILX, co-founded by Cardano Development, provides institutional investors access to private credit investment opportunities in the global development finance asset class, directly targeting sustainable development and climate finance projects across the global emerging markets.

ILX has established the first commercial emerging market private credit fund, ILX Fund I. The Fund fills a gap and addresses the critical need for additional long-term investment in SDG and Climate Finance projects across emerging markets. Currently, available investment capacity falls short of the required volumes due to lack of cross border private investment flows, both in the banking sector and capital markets. ILX provides institutional investors global access to the impact focused MDB, DFI loan market through an efficient fund structure, mobilising private sector capital at scale.

A number of key donors have played a critical role in the creation of ILX by supporting the development and incubation phase of the Fund. These are the German Kreditanstalt für Wiederaufbau (KfW), on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the Netherland’s Ministry of Foreign Affairs and theUK Foreign Commonwealth and Development Office (FCDO)”. They strongly support the ambition of ILX to play a catalytic role in mobilising private institutional investment for the SDGs and the Climate Finance commitments.

Institutional investors are also increasingly mandated to align their investment strategies and policies with the SDGs and Climate Finance objectives. The ILX strategy provides a well-diversified and scalable investment opportunity that is well-aligned with the sustainability objectives and reporting requirements of leading institutional investors such as APG. Additionally, ILX and Cardano Development have long-standing relationships with the MDBs and DFIs, with whom ILX will co-invest and a broad network of European institutional investors that can potentially invest in the second close
of ILX Fund I. The target fund size is USD 1 billion.

An investment in ILX Fund I provides institutional investors with a unique opportunity to access and invest in a diversified portfolio of MDB/DFI originated loans across the global emerging market sectors and regions. ILX is in a strong position to source, select, manage and report on these loan investments with high SDG and Climate Finance impact. ILX Fund will invest in syndicated loans offered by leading MDB/DFIs with whom ILX has well-developed, long-standing relationships and provide investors with access to this network of DFIs. ILX’s diversification strategy will provide market-based returns and deliver positive SDG impact with high consideration for Climate Change adaption and mitigation across the emerging markets.

Dr. Jan Martin Witte, Head of Department Global Equity and Funds, KfW Development Bank: “The ILX SDG targeted emerging market private credit Fund is an important innovation in the growing global impact investment market, providing an innovative conduit for leveraging private capital for the financing of the SDGs and the Paris Climate Agenda. KfW is proud to have played a role in nurturing this new initiative to fruition.”

Kitty van der Heijden, Director-General for International Cooperation, Dutch Ministry of Foreign Affairs: “I greatly welcome the commitment made by APG in ILX. Developing and emerging economies are furthest behind in achieving the SDGs and need to integrate the global climate commitments in their development pathways. More institutional and private capital needs to be mobilized for them to succeed. ILX innovates by leveraging the long-standing track record of development banks such as EBRD, IFC and FMO, thereby enabling pension funds to invest and achieve development impact. Moreover, this is done without the use of risk sharing instruments, which is important for generating private finance for the SDG and climate agendas in a sustainable way. I congratulate ILX, and all parties involved, with this promising solution to serve the global poor through enhanced investment.”

Rachel Turner, Director – International Finance UK Foreign, Commonwealth & Development Office: “The UK FCDO is delighted to have supported bringing this ground-breaking new initiative to completion. COP26 in Glasgow made clear that new ambitious partnerships between capital markets and development finance institutions are needed if we are to mobilise at the scale needed to support developing countries to finance their climate transitions and deliver the SDGs. We congratulate ILX on the launch of the Fund – hot on the heels of the commitments made at Glasgow.”

Joost Zuidberg, Chief Executive Officer, Cardano Development: “As we have a deep-rooted relationship with most MDBs and DFIs, that are clients and investors of Cardano Development’s various initiatives, we were in a unique position to see the high potential to establish a company like ILX to support global institutional investors, MDBs and DFIs to make significant allocations in emerging markets. ILX closes the enormous financing gap that exists between the investment requirements across the emerging markets and institutional investor’s appetite to invest in projects and companies with tangible SDG results and sound climate mitigation and adaptation strategies. We would like to sincerely thank the donors who provided the critical support that enabled the creation of ILX, namely, the German Kreditanstalt für Wiederaufbau (KfW), one of the world’s leading promotional banks, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the Netherland’s Ministry of Foreign Affairs and the Foreign Commonwealth and Development Office”.

Manfred Schepers, co-founder and Chief Executive Officer, ILX: “We are delighted that APG has made this strategic commitment as the fund’s cornerstone investor, demonstrating their strong support for this SDG-focused emerging market private credit asset class that matches both their return and sustainability objectives. We look forward to our long-term partnership with APG and to working closely with the global MDB and DFI community, which are recognised leaders in direct SDG and climate-finance investments across emerging markets. All ILX stakeholders are immensely grateful for the patient and critical donor support we have received since ILX’s inception in 2017”.

About ILX Management: ILX Management B.V. is the Amsterdam-based manager of ILX Fund I, an emerging market focused private credit fund that invests in loan participations originated and structured by Multilateral Development Banks and other Development Finance Institutions (DFI). ILX aims to create large scale investment opportunities in global development finance that directly contribute to sustainable development across emerging markets. www.ilxfund.com

About Cardano Development: Cardano Development (CD) is an incubator and fund manager, established in 2007. Through careful risk-management analysis in data-poor settings, CD identifies scalable solutions that help to make frontier financial markets more inclusive, investible, and sustainable to unlock lasting economic value. CD creates solutions for local currency, credit, and liquidity risks in these markets. With over USD 6 billion assets and USD 1.5 billion capital under management, CD supports its scale-up funds and a number of start-ups with ongoing management services, financial support and corporate governance oversight. Cardano Development works with reputable partners, including foundations, governments, impact investors, institutional investors and commercial partners. www.cardanodevelopment.com

About KfW Development Bank: KfW Development Bank is a leading development bank committed to improving economic, social and environmental living conditions across the globe on behalf of the Federal Republic of Germany and the federal states. KfW is a founding shareholder of TCX and one of its largest shareholders. www.kfw-entwicklungsbank.de

About BMZ: The Federal Ministry for Economic Cooperation and Development (bmz.de) (www.bmz.de) is the German Federal Ministry for Economic Cooperation and Development. The BMZ is one of the core contributors to TCX and supports TCX as part of the BMZ’s global SDG strategy and the Paris Climate Agenda.

About Dutch Ministry of Foreign Affairs: The Dutch Ministry of Foreign Affairs coordinates and carries out Dutch foreign policy, including development cooperation. The Minister for Foreign Trade and Development Cooperation is responsible for Dutch development cooperation policy, that focuses on poverty eradication, sustainable economic development, climate action, and conflict prevention and peace building. Developing private markets and catalyzing private investments is part of this policy, aiming to reach the SDG’s and climate goals.

About FCDO: The UK’s Foreign, Commonwealth & Development Office pursues our national interests and projects the UK as a force for good in the world. We promote the interests of British citizens, safeguard the UK’s security, defend our values, reduce poverty and tackle global challenges with our international partners.

For further information, please contact:

Cardano Development
Maria-Pia Kelly
Communications Manager
[email protected]
M +31 (0) 682 825 139

ILX Management
Mark Beers
Media Relations
[email protected]
M +31 (0)6 37 231 292

FSD Africa Investments (FSDAi), the investing arm of FSD Africa, has today announced a £3m investment into IMFact, an expanding fintech company that uses supply chain financing to provide working capital to micro, small and medium enterprises (MSMEs).

As a “pooled receivables” factoring business, IMFact purchases bulk invoices from MSMEs for a mix of upfront cash and deferred payments. This gives the sellers access to cash without the need to follow up or wait for invoices to be paid, freeing up capital to buy new inventory, pay suppliers, and grow the business.

IMFact’s “pooled receivables” model differs from the pre-existing invoice discounting practice where the best receivables or invoices are cherry-picked by the financing company meaning the rest of the receivables pool cannot be used as collateral. It also provides faster access to working capital than the invoice discounting usually offered by banks because it does not require an upfront deposit or guarantees.

FSDAi’s funding, the first external equity investment in IMFact, comes at a critical time, with Covid-19 having placed undue pressure on MSMEs in many sectors, most notably in the healthcare sector. IMFact’s innovative solution is particularly timely owing to its ability to release additional cashflow that hitherto was locked up.

Under current plans, and subject to further fundraising, IMFact is projected to provide funding totalling £475m to around 570 business over the next five years and support around 5,600 jobs.

Many of the MSMEs expected to benefit are family-owned businesses including those that distribute medical equipment and pharmaceuticals to public and private organisations. However, IMFact will also be working with supply chain businesses in other industries.

Among the first to partner with IMFact is ABC Pharmacy Ltd, which supplies pharmaceutical products to pharmacies, hospitals, and clinics across the country but had faced challenges due to inadequate working capital.

Through IMFact’s financing, ABC Pharmacy is now making a transition in its business model by extending its credit terms to clients. With the increase in capital available the company has been able to increase sales and grow its business. Dr John Muturi, CEO of ABC Pharmacy said: “The financing from IMFact will be a game changer for our future business operations.”

FSDAi’s ultimate objective in making the investment is to encourage the development of technology-enabled, “pooled receivables” financing across Africa. Our analysis shows Africa lags behind global averages for this kind of financing representing less than 1% of global volumes. On the continent, only South Africa has a markedly developed factoring model while the penetration in Kenya stands at less than 2%.

IMFact was established in 2019 by Cardano Development (CD), an incubator and fund manager based in Amsterdam, The Netherlands, with financing from KfW on behalf of the German Ministry for Economic Cooperation and Development (BMZ).  It received initial capital from Rockefeller Foundation and Convergence. IMFact Kenya is the first regional hub to become operational and was developed by CD with funding support from Total Impact Capital Advisors (TIC).

Jane Marriott, the British High Commissioner to Kenya, said: “Building back from COVID-19, boosting Kenya’s status as a hub for financial services, and creating jobs, are at the core of the UK’s Strategic Partnership with Kenya. We’re pleased to support this investment by FSDAi into IMFact, which will support SMEs in Kenya to build back from the challenges of the pandemic.”

Anne-Marie Chidzero, Chief Investment Officer, FSD Africa Investments, said: “We are pleased to be working with IMFact to support the rapid financing of MSMEs in Kenya at a time when many are stuggling to get access to working capital from traditional lending institutions.  We particularly look forward to seeing the impact the investment has on Kenya’s medical and pharmaceutical sector and hope to encourage further scaling of fintech solutions to solve the funding gap among smaller businesses.”

Peter Fiala, Chief Investment Officer, IMFact said: “IMFact is extremely pleased to have passed the extensive scrutiny of FSDAi’s due diligence process which has paved the way for them to become a cornerstone investor in IMFact following the successful financial close of our third-round capital raise. This investment paves the way for further capital investors, including debt, which will support further deployment of capital to our fast-growing list of clients.”

Joost Zuidberg, Chief Executive Officer, Cardano Development, said: “We are delighted to welcome FSDAi into IMFact in support of our early growth in Kenya and expansion to other African markets. We are passionate about financial services innovation, and believe that IMFact will prove to be a step-change in broad access for Africa’s MSMEs to working capital. With its innovative approach in using the pooling of debtors to mitigate risk. IMFact has a very competitive product that directly addresses the barriers for Africa’s MSMEs to access formal and affordable finance.”

For more information, please contact:

FSD Africa Investments

Angellah Khamala

Manager, Content and Communications

Email: [email protected]

The Currency Exchange Fund (TCX) is thrilled to announce that the Swiss State Secretariat for Economic Affairs (SECO), which came onboard as an investor in 2020, has decided to top up its investment in the Fund by USD 10 million. SECO invests in the fund’s sovereign tranche, in parallel with the existing investors BMZ from Germany, FCDO from the United Kingdom, the Dutch Ministry of Foreign Affairs and the European Commission.

The additional investment will strengthen the capacity of TCX to provide currency hedging solutions for impact investments in developing countries. Switzerland is a leading player with 35% of global impact investing funds being managed by Swiss asset managers. Impact investors are intensive users of TCX. Liliana de Sá Kirchknopf, Head of Private Sector Development Division at SECO:

“We are very happy to support TCX with an additional investment in the first loss, committing ourselves to 2045. The uncertainty that Covid brings translates into volatility in financial markets and frequent depreciations of developing
country currencies. Protecting borrowers in these countries against foreign exchange risk is now more important than ever. Moreover, we strongly support the fund’s activities in catalyzing the private sector at scale. TCX takes the currency risk away from small and medium enterprises in developing countries and places it with private investors. This is the type of innovation that is needed today.”

Ruurd Brouwer, CEO of TCX: “We are delighted with this capital increase, as Covid once more has shown that foreign exchange risk should not be offloaded to the poorest. In development finance, the recipients of hard currency loans do not have the means to manage currency risk and should not be forced to take it. Covid-induced depreciations take funds away from fighting the health crisis to servicing debt. This procyclical effect of hard currency lending can be seen at individual, company, sector and country level. With SECO’s additional investment, we can increase our risk-bearing capacity to take over this currency risk from our investors’ clients in developing countries”.

Background information

TCX is a global development finance initiative which offerslong-term currency swaps and forwardsin 100+ financial markets where such products are not available or poorly accessible. The Fund started operations in 2007 and has since then provided hedging instruments with a total volume of USD 9.5 billion, spread over 3500+ transactions. Today, the fund has a total exposure of ca. USD 5 billion in about 60 frontiermarket currencies. By selling parts of this exposure to private investors, it creates markets and gives frontier countries access to the international capital market.
The Swiss State Secretariat for Economic Affairs (SECO) is the Swiss federal government’s center of excellence for all core issues relating to economic and labor market policy. As a division of SECO, Economic Cooperation and Development (SECO WE) contributes to achieving the strategic goals of Switzerland’s foreign economic policy. SECO WE plans and implements economic and trade policy measures to support developing countries as well as Eastern European countries, the Commonwealth of Independent States and the new member states of the European Union.

Press contact: Jos Kramer, [email protected]

GuarantCo Management Company Limited has appointed Layth Al-Falaki as its new Chief Executive Officer starting mid-January 2022. GuarantCo Management Company Limited is the manager of GuarantCo, a Private Infrastructure Development Group (PIDG) company.

Layth has been the Chief Risk Officer (CRO) at PIDG since April 2018. He is currently a non-executive member of the Boards of PIDG companies, the Emerging Africa Infrastructure Fund and GuarantCo.

Prior to joining PIDG, Layth was CRO at ICICI Bank UK, the European hub of India’s largest private sector bank, where his responsibilities included credit, operational, market and liquidity risk as well as regulatory frameworks. Prior to this, he was the CRO at the British Arab Commercial Bank, formerly part of the HSBC group. Layth has had a long career in banking and has in-depth experience of dealing in emerging markets. His experience includes trade services, operations, audit, marketing, correspondent banking and compliance. He has a Bachelor’s degree in Statistics and Management Science and a Master’s degree in Operational Research from the London School of Economics and Political Science.

Yukiko Omura, Chair of the GuarantCo Board and Director of PIDG, said: “I am delighted with Layth’s appointment.  His significant banking and emerging market experience, his CRO role at PIDG and his Directorship at GuarantCo will set him up successfully for his new CEO position at GuarantCo whilst ensuring the continuation of leveraging the multiple product propositions that the various PIDG companies can offer to deliver a significant impact to support sustainable, essential infrastructure financing in lower income countries across Africa and Asia.”

Philippe Valahu, CEO of PIDG, said: ‘This appointment is a great decision for GuarantCo and PIDG. Layth will bring knowledge, experience and a deep understanding of the markets we operate in and will help the PIDG Group further strengthen its position.’

Joost Zuidberg, Chief Executive Officer of Cardano Development and Chair of GuarantCo Management Company, said: “Following a thorough recruitment process, I am pleased that Layth has been selected and accepted the GuarantCo CEO role.  His in-depth experience, PIDG and GuarantCo knowledge and his working style has made him the ideal candidate for the role.  I look forward to working with Layth to further establish GuarantCo as a local currency house that delivers long-term credit solutions to bridge the infrastructure financing gap to people in countries who need it most.”

Layth Al-Falaki, Chief Risk Officer of PIDG and forthcoming CEO of GuarantCo, said: “I’m delighted to have been appointed as the new CEO of GuarantCo and excited to continue to deliver the important work that can make a difference where it is needed the most. I see this as a vital part of the overall PIDG offer and I’m looking forward to working with the team on innovative solutions to take GuarantCo to the next level.”

About GuarantCo           

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development www.guarantco.com

About PIDG       

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 171 infrastructure projects to financial close which provided an estimated 217 million people with access to new or improved infrastructure. PIDG is funded by the governments of  the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany and the IFC www.pidg.org

Cardano Development  

Cardano Development (CD) is an incubator and fund manager, established in 2007. Through careful risk-management analysis in data poor settings, CD identifies scalable solutions that can help to make frontier financial markets more inclusive, investible, and sustainable to unlock lasting economic value. CD creates scalable solutions for currency, credit, and liquidity risks in these markets. With over USD 5 billion assets and USD 1.2 billion capital under management, CD supports five scale-up funds, including TCX, GuarantCo, Frontclear, BIX Capital and AGRI3 and six start-ups, ILX, the Water Finance Facility, IMFact, NASASA, KCEF and Nyala with ongoing management services and corporate governance oversight. Cardano Development works with reputable partners including foundations, governments, impact investors, institutional investors and commercial partners. https://www.cardanodevelopment.com/

GuarantCo, a Private Infrastructure Development Group (PIDG) company, has announced its intention during COP 26 in Glasgow to allocate approximately USD 250 million of guarantee capacity towards accelerating climate action in India and Vietnam. This was also mentioned by the UK Prime Minister as part of the UK Clean and Green Initiative.

GuarantCo is working on two potential transactions it hopes will be able to utilise this climate mitigation guarantee capacity and work towards clean green initiatives subject to the transaction negotiations reaching successful conclusions.

Axis Bank is the third largest private sector bank in India. GuarantCo is currently working on a potential USD 200 million guarantee framework (with total transaction size of USD 300 million) with Axis Bank in India aimed at accelerating the e-mobility eco-system in India through the capex financing for a wide range of entities engaged in manufacturing, distribution and servicing of electric vehicles, batteries and charging infrastructure.

EVNFinance (EVNF) is a non-bank financial institution in Vietnam. GuarantCo is collaboratingwith EVNF with the intention to support its sustainability agenda through a future focus on renewable energy. The forthcoming USD 75 million transaction with proposed guarantee of USD 50 million hopes to be the first onshore, local currency certified green bond issue in Vietnam and to be the first-ever partially guaranteed green bond issued there.

Philippe Valahu, CEO, PIDG, said: “The urgency of climate action requires innovative solutions that enable the private sector to invest, and we are delighted that PIDG Company GuarantCo is announcing these partnerships as part of PIDG package of commitments at COP26 in Glasgow.”

Emily Bushby, Interim CEO GuarantCo, said: “We are delighted to be able to mobilise guarantee capacity in a total amount of approximately USD 250 million to further climate mitigation and adaptation efforts in line with PIDG and GuarantCo’s aims and located in two of our priority markets in Asia.  We hope that all of our transactions which are able to benefit from this capacity will set a precedent for future initiatives in order for GuarantCo to make a significant impact towards positive climate action and support the Sustainable Development Goals through the long-term, local currency credit solutions that we provide.”

Amitruck, Africa’s leading digital logistics company, has partnered with IMFact, a Smart Finance alternative to traditional bank lending for Kenyan SMEs in supply chain businesses.

The partnership will enable Amitruck to increase its financial stability and optimise its working capital, thus eliminating constraints related to overhead costs and long payment cycles.According to IMFact Commercial Director, Derrick Lwatati, “IMFact offers clients the ability to grow their business by turning their debtor portfolio immediately into cash. Also known as factoring, this method allows IMFact clients to use the cash we inject into their businesses to purchase more goods or optimize payments to their suppliers.

According to IMFact Commercial Director, Derrick Lwatati, “IMFact offers clients the ability to grow their business by turning their debtor portfolio immediately into cash. Also known as factoring, this method allows IMFact clients to use the cash we inject into their businesses to purchase more goods or optimize payments to their suppliers.

“As IMFact clients access cash immediately they are able to extend favourable payment terms to their clients or even offer upfront credit as a strategy to secure new business which ensures they generate more sales, “he added.

Factoring differs from the traditional invoice discounting offered by banks which focuses on single invoices for large institutions coupled with collateral demands.  Instead, it seeks to understand the business and its operating environment as well as data related to potential for growth.

According to Lwatati, “We have affiliated with Amitruck because of their innovative approach to solving the inefficiencies in the logistics sector. Their solutions have disrupted the local transport market and given them an edge over other trucking and logistics companies.”

Trucking logistics companies usually face challenges in allocating funds to fuel trucks, pay drivers and maintain quality professional standards. IMFact’s financing bridges the gap to enable transporters to run their businesses efficiently and affordably.

Speaking about the partnership, Amitruck CEO & Founder, Mark Mwangi said, “We have been able to realize financing with IMFact at attractive commercial terms and we especially like the flexibility it offers. This means that we can use exactly the amount of financing we need without any additional costs as bank financing would have.”

“Amitruck is going across borders, and this has been made possible through partnerships like this where Growth Africa through its accelerator program offers mentorship and advisory support then brings on board IMFact to plug in the much needed financial resources. We are honoured to be part of this ecosystem alongside other SMEs in the logistics sector that have been given the opportunity to scale, hence impact Africa’s economy through efficient logistics solutions.”

For more information please contact

Mary Gitari I Brand Spark PR  I Tel : 0722 224 972 I E: [email protected]
Mark Mwangi I CEO, Amitruck I E:[email protected]

ABOUT AMITRUCK

Amitruck, is a trucking logistics marketplace that allows transporters (owners of motorbikes, pick-ups, vans and trucks) to find and connect with customers through its mobile and web applications.

Transporters bid for work on the platform, ensuring competitive prices, while cargo owners have convenient access to a range of competitive offers and can choose a transporter based on price, rating and experience.

The platform has over 5500 vehicles that have completed over 40,000 deliveries for over 200 corporate clients and is re-defining and building Africa’s logistics marketplace by bringing trust and transparency back to transport. For more information visit www.amitruck.com

ABOUT IMFACT

IMFact is a pan-African, non-deposit taking financial institution, using supply chain financing to provide working capital to SMEs, which at present have limited access to both financial and banking systems across the continent. Launched in 2019, our fintech factoring solution is nimble, responsive, and flexible in meeting the financing needs of our clients. IMFact was incubated by its parent company Cardano Development (CD), an incubator and fund manager based in Amsterdam, The Netherlands, with grant funding from KfW on behalf of the German Ministry for Economic Cooperation and Development (BMZ).

IMFact has also received early- stage grant funding from The Rockerfeller Foundation and Convergence. Further to CD’s initial investment, FSD Africa Investments has provided the first external equity investment in IMFact. IMFact Kenya is the first regional hub to become operational and was developed by CD with funding support from Total Impact Capital Advisors (TIC).

For more information visit www.imfact.co.ke

TCX, together with climate consultancy South Pole, has measured and compensated its greenhouse gas emissions for 2020.

The total greenhouse gas (GHG) footprint of TCX’s operations and liquidity portfolio for the calendar year 2020 was 408 metric tons of carbon dioxide equivalent (‘tCO2e’). The main source of GHG emissions was TCX’s liquidity portfolio, which amounted to approximately 285 tCO2e during 2020. Given the size of the portfolio this presents an extremely low value, with a carbon intensity of only 0.1413 tCO2e/USD million invested. TCX’s full GHG Accounting Report for 2020 can be found here.

As expected, business travel emissions experienced a sharp decline of about 66% from 270 tCO2e in 2019 to only 92 tCO2e last year. This is primarily due to the sudden halt of international business travel caused by the Covid pandemic. The challenge – not only for TCX but all internationally active companies – will be to maintain a lower travel intensity by continuing to rely on technical solutions including video calls to substitute non-essential in-person meetings. Another effective measure increasingly adopted by TCX staff is to substitute short haul flights with trains.

To compensate its emissions, TCX supports the Cookstove Project for Maasai Communities in Kenya by acquiring 408 Gold Standard Voluntary Emissions Reduction (GSVER) certificates. By using the cookstoves, the Maasai people reduce the amount of smoke produced by indoor cooking, limiting their exposure to dangerous pollutants that cause respiratory diseases. Women and children also spend less time collecting firewood and instead focus on earning an income or attending school, respectively. Meanwhile, demand for firewood is alleviated from the Mau Forest the largest native montane forest in East Africa. The decision to compensate TCX’s emissions by supporting the cookstove in Kenya is in line with the Fund’s focus area and further reflects its commitment to increase its impact in Sub-Saharan Africa.

GuarantCo, part of the Private Infrastructure Development Group (PIDG), has provided a contingent capital facility of up to PKR 8.25 billion (c. USD 50 million) with a 23 year tenor to InfraZamin Pakistan to issue local currency credit guarantees against debt financing for infrastructure projects in renewable energy, healthcare, transport, and digital communications.

InfraZamin Pakistan is an initiative set up by PIDG, with a PKR 8.25 billion contingent capital facility by GuarantCo, PKR 2.475 billion (c. USD 15 million), equity from InfraCo Asia Investments and a USD 1 million PIDG Technical Assistance returnable grant, to establish a for-profit credit enhancement facility in Pakistan. The facility seeks to address gaps in the local infrastructure financing market through increased use of credit guarantees. InfraZamin Pakistan will issue credit guarantees for greenfield and brownfield infrastructure-related debt instruments based on the company’s ‘AAA’ long-term rating (by PACRA) and attract private capital investors who would otherwise not participate in lending to infrastructure-related sectors in Pakistan.

The contingent capital that GuarantCo provides to InfraZamin Pakistan can be leveraged up to 10 times. On this scale, guarantees can be truly transformational for local capital markets, as InfraCredit Nigeria, which GuarantCo set up with the Nigeria Sovereign Investment Authority in 2017, has proven.

The core equity providers for InfraZamin Pakistan are InfraCo Asia Investments, another PIDG company, providing 60 percent equity, and Karandaaz Pakistan, a non-profit funded by UK’s Foreign, Commonwealth and Development Office (FCDO) and the Bill & Melinda Gates Foundation, with 40 percent. Total shareholder equity will be PKR 4.125 billion (c. USD 25 million).

InfraZamin aims to catalyse infrastructure development by filling a current gap in the credit markets by providing credit guarantees. The company aims to significantly transform the infrastructure financing market (both bank and capital markets) in Pakistan by mobilising first-timelocal borrowers and investors. The increased participation from new and existing investors, new financial structures and guarantee products will ultimately attract an increased flow of finance to infrastructure with progressively lower levels of guarantees required.

Emily Bushby, Interim CEO of GuarantCo, said: “Following the set-up of InfraCredit Nigeria in 2017, we are very pleased that InfraZamin has now become a reality.  The contingent capital that we provide will increase the volume of guarantees InfraZamin can write.  In addition, we are keen to partner with InfraZamin passing on our institutional knowledge of closing transactions to meet the infrastructure need. We are confident that the company, under Maheen Rahman’s leadership, will become a game-changer for Pakistan’s project finance and debt capital market development and make a significant impact to benefit local people.”

Maheen Rahman, CEO of InfraZamin Pakistan, said: “We at InfraZamin aim to address a very serious gap in Pakistan’s financing and capital markets. We are all here well aware of the chronic underinvestment in Pakistan’s infrastructure landscape. We are also well aware of the difficulties that are faced in raising financing for such projects and the gaps that exist in the risk taking framework of our banking and capital markets sectors. Infrazamin is founded on the firm principle that such market failures need to be addressed via market based solutions that make commercial and economic sense for all stakeholders.”

Philippe Valahu, CEO of PIDG, said: “InfraZamin Pakistan is a true PIDG Group effort.  Initiated by GuarantCo on the back of its experience in setting up InfraCredit Nigeria, InfraCo Asia has come in with the equity and PIDG Technical Assistance provided a USD 1 million returnable grant for InfraZamin’s set up. We are currently looking to set up more local guarantee companies based on the InfraCredit model, to develop capital market specific expertise and solutions that deliver improved access to sustainable infrastructure for people and businesses in those countries.”

About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development. www.guarantco.com

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 171 infrastructure projects to financial close which provided an estimated 217 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany and the IFC. www.pidg.org

About InfraZamin Pakistan

InfraZamin Pakistan is a commercial credit enhancement facility, developed by GuarantCo, that seeks to crowd-in funding from the local market for sustainable and socially responsible infrastructure projects in Pakistan. Development impact, trust and additionality form the core of InfraZamin’s business values. The facility is an initiative of the Private Infrastructure Development Group (PIDG). InfraZamin’s sponsors include PIDG group companies InfraCo Asia Investments (InfraCo Asia) and GuarantCo, in partnership with non-profit Karandaaz Pakistan (Karandaaz).