Equity Group and the International Finance Corporation (IFC) have signed a partnership agreement in support of the sustainable development of Africa through supporting micro, small and medium sized businesses (MSMEs) from all sectors of the economy including climate-smart businesses.
The partnership has seen IFC and its partners including the Dutch Development Bank (FMO), British International Investment (BII) and Symbiotics, ResponsAbIility from Switzerland commit $ 165 million towards Equity’s `Africa Recovery and Resilience Plan’.
The plan will see the group, through its regional banking subsidiaries, finance at least 5 million MSMEs and 25 million households therefore creating 50 million direct and indirect jobs.
The $ 165 million includes $ 50 million from IFC, $ 50 million from British International Investment (BII) and $ 65 million from Symbiotic, Responsibility and FMO, the Dutch entrepreneurial development bank and a long-time shareholder in Equity through Arise Investments.
Further to the agreement signing, IFC and the IFC Financial Institutions Growth Fund acquired a 6.71 percent stake in Equity Group, East Africa’s largest banking group. The investment is IFC’s first in Africa that aligns with the corporation’s approach to increase green equity investments in financial institutions.
“Through this equity investment, Equity Group commits to zero lending for coal related projects such as the development or expansion of coal-fired power plants, coal mines, transportation assets used exclusively for coal, or infrastructure assets exclusively dedicated to support coal mines and coal transportation, or any utility company that generates more than 20 percent of energy or revenues from coal, or have an annual coal production of 10 million tons or more; or have an installed coal-fired capacity of 5,000MW or more,” the group said in a statement.
Speaking during the partnership signing ceremony, Equity Group managing director and CEO Dr. James Mwangi said they are delighted to welcome IFC, a member of the World Bank Group to the Equity family as their second largest shareholder.
“With IFC’s reach as the largest global development institution focused on the private sector equity, we will be able to further advance economic development by empowering and catalyzing the transformation of the lives and livelihoods of the African people and will enhance the success and sustainability of Equity’s ‘Africa Recovery and Resilience Plan,” Mwangi said.
Equity’s Africa Recovery and Resilience Plan is built on five key pillars hinged on its twin engine: the social engine and the economic engine. Through its social impact initiatives, Equity will continue investing in the social transformation and environmental impact of communities within East and Central Africa to drive inclusive growth.
Speaking at the signing ceremony, IFC Vice President, Risk and Finance, Mohamed Gouled said “supporting small businesses, digital financial services and climate-friendly projects is central to IFC’s strategy in Africa to help create jobs, respond to climate change, and leverage the opportunities afforded by the digital economy.”
Speaking on behalf of British International Investment (BII) Head of Financial Services and Africa Coverage, Stephen Priestley said British International Investment is pleased to partner with the IFC in providing a new loan facility to Equity Group.
“This being our second investment in Equity, this funding will further increase working capital to more local businesses and help to fund climate eligible projects in Kenya. This climate finance facility demonstrates BII’s ambition to scale climate finance across the African continent and our ongoing commitment to support sustainable, productive, and inclusive economic growth in Kenya,” Priestly said.