IFC and Equity Group Holdings Plc. announced today that they are expanding their partnership to support Africa’s sustainable development by improving access to financial services for small businesses and financing green projects in six countries in East and Central Africa.
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IFC’s support, along with that of its partners British International Investment, FMO, Symbiotics and ResponsAbility, will help Equity Group implement its $6 billion “African Recovery and Resilience Plan” to fund five million businesses and 25 million households to create 50 million jobs both directly and indirectly in Kenya, DRC, Uganda, Rwanda, Tanzania and South Sudan.
Support relies on:
- IFC and IFC Financial Institutions Growth Fund have acquired a 6.71% stake in Equity Group, East Africa’s largest banking group. This is IFC’s first investment in Africa that aligns with IFC’s approach to increasing green investments in financial institutions. Thanks to this equity investment, Equity Group undertakes not to lend any loans for coal-related projects. Additionally, Equity Group Holdings has agreed to allocate $80 million in climate equity funding covering all subsidiaries over the next five years.
- As part of IFC and Equity Group’s expanded partnership, IFC, along with its partners, is also providing a loan to Equity Bank Kenya to support lending to small and medium enterprises and will specifically focus on supporting smart projects facing to the climate, who are developing solutions to help tackle the climate emergency. The $165m subordinated loan to Equity Bank Kenya includes $50m from IFC, $50m from BII and $65m from Symbiotics, ResponsAbIility and long-time shareholder Dutch entrepreneurial development bank FMO of Equity through Arise Investments.
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“With IFC’s reach, we will be able to advance economic development by empowering and catalysing the transformation of African lives and livelihoods and we will strengthen the success and sustainability of Equity’s actions. “African Recovery and Resilience Plan”said Dr. James Mwangi, Managing Director and CEO of Equity Group.
“Supporting small businesses and climate-friendly projects is at the heart of IFC’s strategy in Africa to help create jobs, respond to climate change and take advantage of the opportunities presented by the digital economy. IFC’s deepening partnership with Equity Group reflects this strategy and will support economic growth in Africa as the continent recovers from the effects of the COVID-19 pandemic,” said Mohamed Gouled, Vice President of Risk and IFC Finance.
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“This investment will further increase working capital for more local businesses and help fund climate-eligible projects in Kenya,” said Seema Dhanani, Kenya Bureau Chief and Coverage Director, South Africa. East, BII.
This is the second facility IFC has entered into with Equity Group Holdings in the past year, the first being a $50 million loan to Equity BCDC (a subsidiary of Equity in the DRC) in Congolese Francs which helps the bank provide additional local currency. lending to underserved micro, small and medium enterprises in the DRC.