This Week in Africa Finance-41223

The COP28 summit in UAE is still going on with a lot of dealmaking like Kenya signing deals worth $4.48 billion for seven green projects, including geothermal generation plants, fertiliser production, and a renewable energy-powered data centre. Other activities this week in Africa Finance include Zimbabwe's Debt Headache, the World's Largest Climate Fund invest $250 Million in an African solar Facility, Gabon blocks Carlyle's Company's $1.3 Billion Oil Acquisition, Mastercard Foundation Africa Growth Fund creates new investment vehicles and Notable deals of the week.

Sovereign Debt

Zimbabwe's Debt Headache

Zimbabwe is looking to repay its $400 million Afreximbank using 35% of its platinum exports, as it tries to address its sovereign debt and access international credit lines after years of exclusion from the global financial markets.

Why is this important: Rich in coal, chromium ore, nickel, copper, iron ore, vanadium, tin and platinum group metals, the nation has faced economic challenges resulting in a significant sovereign debt, with no access to financial assistance from the IMF and World.

The numbers: Zimbabwe has an $18 billion debt burden, with a $400 million loan from Afreximbank which carries a 10.2% interest rate over a six-year term and rises to 12.2% in the event of default. Its inflation exceeds 176% with an 89% devaluation of the Zimbabwean dollar against the US dollar.

The Bottom Line: Most African countries are facing challenging sovereign debt issues, but have the luxury of access to international financial markets, leading Private and Sovereign creditors and support from the IMF and the World Bank as they restructure their economy. Zimbabwe needs to unlock the same access to start the road to financial inclusion and economic recovery.

Renewable Energy

World's Largest Climate Fund Acumen to Invest $250 Million in Africa-focused Solar Facility.

US-based climate fund Acumen is establishing a $250 million facility to bring electricity from off-grid solar projects to people in some of Africa’s poorest countries. The project named 'The Hardest-to-Reach Initiative' will target countries will no access to electricity ranging from the Democratic Republic of Congo to Somalia and over 16 African nations.

Oil and Gas

Gabon's State Oil Company to Block Carlyle's Company's $1.3 Billion Acquisition.

Gabon's national oil firm is seeking to exercise its first refusal to acquire Carlyle's Assala Energy after the firm agreed to sell the business to France's Maurel & Prom for $1.3 billion.

Investments

Mastercard Foundation Africa Growth Fund expands Investment Remit.

Mastercard Foundation Africa Growth Fund is looking to broaden its investment impact across the continent through three focused investment vehicles such as VestedWorld: Investing in early-stage companies in Nigeria, Ghana, Kenya and Tanzania, SME Impact Fund: focused on empowering smallholder farmers and Chui Ventures: a venture capital firm investing in innovative African entrepreneurs.

Other Notable Deals

Exits

• Affirma Capital has exited its stake in Nigeria-based manufacturer of aluminium cans GZ Industries to  Oppenheimer Partners led by Jonathan Oppenheimer, son of South African billionaire Nicky Oppenheimer.

Asset Management

• South Africa-based Stanlib Asset Management is to invest 3 billion rand ($160 million) through its Khanyisa Energy Transition Fund in renewable energy initiatives across the continent.

Private Credit

• Africa's leading infrastructure solutions provider Africa Finance Corporation has invested US$60 million in Angola's largest private oil company Etu Energias (formerly Somoil). The investment is part of a $190 million debt facility to support Etu Energias in acquiring oil and gas reserves co-owned by France’s TotalEnergies and Japan’s Inpex Corporation.
• IFC has committed a target size of US$200 million to a USD-denominated refinancing facility (AGIF II, or the Fund). AGIF II will be managed by TLG Capital Limited (TLG) and will invest in projects for unattended markets in sub-Saharan Africa.

Fundraising

• Early-stage technology venture capital firm EchoVC has launched a new fund the "EchoVC Eco Pilot Fund I" a US$2.5 million fund aimed at investing in promising pre-seed startups in climate energy, agriculture and mobility.
• The International Finance Corporation (IFC) has invested $75 million in the 'Apis Growth Markets Fund III" managed by London-based private equity (PE) firm Apis Partners. The fund will issue cheques of $60-70 million to fast-growing companies that are using technological innovations to expand access to financial services.

Private Equity

• Development Partners International (DPI) and Verod Capital have invested in Nigeria-based digital infrastructure company Pan African Towers(PAT). The investment will be used to fund the company's ongoing expansion.

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