Three EA nations to benefit from $1b special fund

Companies in Kenya, Tanzania and Rwanda are poised to benefit from a new Ksh129 billion ($1 billion) special fund aimed at supporting sustainable development projects across Africa.

This new initiative, known as the Africa Capital Hub (ACH) and spearheaded by Bankers without Boundaries (BwB), was unveiled during the African Financial Industry Summit (Afis) held in Casablanca, Morocco, on Tuesday. Alongside Nigeria, the three East African nations have been selected as pilot beneficiaries.

The ACH aims to mobilise at least $1 billion in capital from global private, public, and philanthropic sources over a five-year period. The funding will target projects in key sectors, including agriculture, energy, infrastructure, health and education.

In addition to financing, the hub will offer free technical advice to governments and investors, focusing on capital mobilisation, financial structuring, and project engineering.

According to Rupesh Madlani, Chief Executive of BwB, the programme is designed to overcome persistent challenges hindering investments in Africa.

“The appetite for sustainability-focused initiatives in Africa is clear, but time after time, the same issues emerge: small and fragmented projects, misalignment between public and private sector motives, and a shortage of investable deals,” he explained.

“The ACH will break down these barriers by solely focusing on transactions, aligning only with the environmental and social goals of countries and leveraging Africa-led partnerships and pan-continental initiatives to further harmonise Africa’s investment landscape.”

Although the programme will eventually extend to all African nations, Kenya, Tanzania, Rwanda, and Nigeria will serve as the pilot countries for the first year.

These nations were chosen for their business-friendly environments, pipelines of bankable projects and commitment to principles such as the rule of law and property rights.

Dr Mahmoud Mohieldin, United Nations Special Envoy on Financing the 2030 Agenda and chair of the ACH advisory board, said selected countries also face some of the widest financing gaps on the continent: “They have been identified as relatively business-friendly, with a pipeline of bankable projects and a strong emphasis on governance.”

The programme is set to commence in January next year. Funds will be directed towards sectors traditionally viewed as high-risk by most financiers.

Kenya’s inclusion comes despite recent political upheavals, including anti-government protests that disrupted business operations. Dr Mohieldin dismissed concerns about these events, describing them as political risks common worldwide.

“Countries on the continent are still progressing towards political freedom, democratisation, and enhanced governance, but it’s fair not to wait until perfection is achieved,” he said.

The programme is set to commence in January next year. Funds will be directed towards sectors traditionally viewed as high-risk by most financiers.

Project vetting in the four countries is already underway, with stringent criteria requiring alignment with Sustainable Development Goals and demonstrable positive environmental impact.