IFC makes record investments in Africa

28th August 2023 By: Rebecca Campbell - Creamer Media Senior Deputy Editor

IFC makes record investments in Africa

Photo by: Creamer Media

The International Finance Corporation (IFC), which is part of the World Bank Group, has reported that, over the 12 months from July 1, 2022, to June 30, 2023, it made investments totalling $11.5-billion in 40 African countries, to help accelerate the continent’s energy transition, enable green manufacturing, stimulate intra-African trade, increase local food production, strengthen small businesses, and create jobs. This total is a record amount in terms of IFC funding for the continent.

“At difficult times like these, when the shockwaves of multiple crises are shaking economies worldwide, we are stepping up our work to support a resilient, inclusive and greener private sector that is helping provide infrastructure and greener solutions while also tackling food security and climate change,” affirmed IFC VP for Africa Sérgio Pimenta. “Catalysing increased private sector innovation and financing for addressing climate change, bridging gender gaps, and empowering the next generation of startup leaders has been at the forefront of our work this past year and will continue to drive our engagements as we work with partners to create jobs and opportunities for more people.”

The IFC investments in Africa last year included $1.98-billion to develop and scale up small businesses and create jobs. Another $1.76-billion went to strengthen digital connectivity including expanding telecommunications tower, broadband and mobile internet networks. A further $1.12-billion was allocated to finance trade, while $876-million was to finance the transition to green energy.

Of the total of $11.5-billion, $3.5-billion was in the form of short-term financing, with the IFC mobilising another $3.1-billion. Regarding its own investments, 48% were in low-income, fragile and conflict-affected countries. Projects to address climate change accounted for 40% of the IFC investments in Africa.

Regarding climate change, $1.1-billion was invested in AMEA Power’s project to build Egypt’s largest (to date) solar and wind power plants. Sococim in Senegal received a €242-million financing package and BUA Cement in Nigeria a $500-million investment, in both cases to develop low-carbon cement manufacturing.

To strengthen digital connectivity, the IFC and the Multilateral Investment Guarantee Agency (another member of the World Bank Group) jointly made equity investments in, and gave loans and guarantees, with a total value of $1.3-billion, to Safaricom Ethiopia’s greenfields telecommunications network across Ethiopia.

To stimulate the development of small businesses, partners in the 12-country Base of the Pyramid programme received $208-million; this funding also covered the integration of two more countries, Cameroon and Madagascar, in the programme. The IFC also continued its support for other small business promotion programmes, such as the Alliance for Entrepreneurship in Africa. Further, the IFC launched the She WINS Africa programme, to support and help the development of women-led small startups across the continent, among other programmes to help women in the private sector in Africa.