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Funding Africa’s impact projects

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Funding Africa’s impact projects
The USD100-million will be used to part finance projects in four impact sectors: renewable power generation, health, food and water scarcity - as well as sustainable cities and green transportation, Image credit: Leon Louw for WhyAfrica.

Funding Africa’s impact projects

One of Africa’s leading banks will invest close to USD100-million in impact projects across Africa.

Last week, Rand Merchant Bank (RMB) announced that it has invested in Acre Export Finance Fund I which targets commercial debt tranches of Export Credit Agency (ECA) transactions supporting climate-aligned infrastructure in Africa.

The fund has announced its first close on 17th of April in which it has successfully raised an equity of about USD100-million which will be used to part finance projects in four impact sectors: renewable power generation, health, food and water scarcity – as well as sustainable cities and green transportation.

According to Aymeric Perrin-Guinot, Senior Transactor ECA Finance at RMB London the fund will enable the mobilisation of up to USD2-billion toward impact projects.

“ECA finance, by enabling access to long-term debt for borrowers in emerging markets, is seen as a key contributor to the reduction of the infrastructure financing gap in Africa, which is estimated to be over USD100-billion every year.”

Multiplier effect where deployed (Funding Africa’s impact projects)

Siyanda Mflathelwa, Sector Head of PPPs and Concessions at RMB says that the fund fills a specific gap in the market which is the funding of the uncovered portion of ECA transactions, which has become increasingly difficult to fund. Thereby unlocking transactions that will have a multiplier effect on the economies of the countries where it is deployed.

The IMF has recently noted that for every USD1-million invested in infrastructure projects, between 8 and 30 jobs are created in low income developing countries.

“In addition, the fund is expected to have a significant positive social, environmental and economic impact, underlining RMB’s own ambitions in sustainable finance and our commitment to support Africa’s transition to a lower carbon economy in line with the Paris Agreement.”

Acre Export Finance Fund will align all its investments with the UN’s 17 Sustainable Development Goals (SDGs) and leverage industry-leading frameworks for impact reporting.

Perrin-Guinot added that RMB’s investment in the fund is a great example of African banks contributing to solutions to African problems.

Hussein Sefian, CEO of Acre Impact Capital said: “RMB’s investment in the Fund demonstrates the positive role that African financial institutions are playing in supporting the financing of climate-aligned essential infrastructure in Africa. We are pleased to have received commitments from premier African investors such as RMB.”

Funding African impact projects

Funding Africa’s impact projects
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Funding Africa’s impact projects

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