IFC has provided a MXN350 million loan ($18 million) to Altum Capital, a private debt fund that seeks to expand financial inclusion in Mexico by providing financing to non-banking financial institutions and directly to small and medium enterprises (SMEs).
Financial returns at UK development finance institution CDC will decline over the next five years, as part of a strategy to take on more risk after almost a decade of above-average return on investment, according to CDC’s chairman Graham Wrigley. HM Treasury requires that CDC provide an average 3.5% return on investment across its portfolio, as agreed in the 2012 Investment Strategy. Since then, CDC has averaged a 7% return, with a 10.3% average between 2012-2016.
As part of the new five-year strategy agreed last year, CDC has committed to investing in new, higher-risk ways to “tackle specific market failures that hold back development.” It has expanded its metrics for measuring impact beyond job creation, and is committed to looking for new ways to use its financing to mobilize other sources of capital and improve transparency and accountability. Since 2015, CDC has also shifted its portfolio to investments exclusively based in Africa and South Asia, with a higher potential development impact that Wrigley says is a worthwhile trade-off for higher risk and lower financial returns.
Ethiopia’s Ayka Addis Textile & Investment Group, which has reported massive losses for the past four years, is to receive a pre-shipment credit from Development Bank of Ethiopia (DBE). The company owes DBE ETB2.3 billion ($82 million) in project debt and working capital credit. DBE’s management had taken a strict credit stand against the borrower citing its outstanding loan, repayment history and loan portfolio, but the DBE board has opted to extend assistance to enable Ayka to continue importing and exporting.
OPIC has approved $1.8 billion in financing and political risk insurance for multiple projects in Latin America, Eastern Europe, Asia and Africa. The projects include:
$250 million in financing to support the $932 million Pasto-Rumichaca toll road 29-year PPP concession in Colombia which is sponsored by Concesionaria Vial Union del Sur’s (a joint venture between Sacyr Concesiones and Herdoiza Crespo Construcciones).
$250 million in political risk insurance related to the Naftogaz Purchase Facility which helps Naftogaz build up gas reserves during the summer months to maintain a reliable supply and affordable prices.
$100 million in financing to IndusInd Bank to support microfinance lending to women.
$100 million to Africell to support the upgrade and expansion of mobile telecommunications networks in Gambia, Sierra Leone, Uganda and Democratic Republic of the Congo.
$225 million in financing to Mytrah Vayu (Sabarmati) Private Ltd. to support the development of a 252MW wind farm in Tamil Nadu, India.
Up to $250 million in financing to Azul Linhas Aereas Brasileiras for engine maintenance on its short-haul fleet serving these markets.
$100 million in financing to support the expansion of SME, consumer and housing lending in El Salvador, Guatemala, Honduras, Costa Rica, Nicaragua and Panama.
$142.5 million in financing to CrediQ to support the expansion of vehicle finance programs for small and medium enterprises in sectors such as construction, agriculture and transportation.
African Development Bank Board has approved a $15 million equity investment in Africa Food Security Fund (AFSF), to support enterprises in agri-business SMEs in Africa. AFSF is a second-generation fund targeting a total capitalization of $100 million. The Fund will invest in potential high-growth SMEs operating in the food and agriculture value chains across sub-Saharan Africa. The fund manager is Zebu Investment Partners.
IFC and Dalus Capital are providing a $10 million capital investment to eFactor Network, a Mexican fintech company specialized in factoring and working capital. Through a multifunding and multicurrency electronic factoring marketplace, eFactor Network allows the connection between large buyers, suppliers and financial institutions (banking and non-banking) to optimise working capital by realising electronic discounts in real time. Proceeds from the capital injection will be used to develop new financial products for SMEs.
Climate financing by the world’s six largest multilateral development banks (MDBs) – the World Bank group, African Development Bank, Asian Development Bank, EBRD, EIB and the Inter-American Development Bank group – rose to a seven-year high of $35.2 billion in 2017, up 28% from the previous year.
The MDBs’ latest joint report on climate financing says $27.9 billion, or 79% of the 2017 total, was devoted to climate mitigation projects that aim to reduce harmful emissions and slow down global warming. The remaining 21%, or $7.4 billion, of financing for emerging and developing nations was invested in climate adaptation projects that help economies deal with the effects of climate change such as unusual levels of rain, worsening droughts, and extreme weather events.
Speaking at a meeting of the WTO Working Group on Trade, Debt and Finance on 8 June, director-general Roberto Azevêdo highlighted the significant progress made in improving access to trade finance, in response to the persistent gaps in provision which affect small businesses and poorer countries in particular.
Azevêdo outlined progress in a number of areas, including working with partners to enhance existing trade finance facilitation programmes. In 2016, these programmes supported around $22 billion in trade transactions. In 2018 they are set to reach over $35 billion – an increase of more than 50% in just two years.
G7 development finance institutions (DFI) plan to mobilize $3 billion by 2020 for investment in business activities by women. The ‘2X Challenge: Financing for Women’ involves FinDev Canada, CDC, OPIC, Cdp, Proparco, JBIC and JICA, with support from DEG.
Windlab Developments Tanzania Ltd has been granted an Environmental and Social Impact Assessment Certificate for the construction of the 300MW Miombo Hewani Wind Farm and Transmission line project located north of Makambako in Southern Central Tanzania. The 100MW first phase will require a $300 million investment over the 25-year life of the farm. The project has secured an Energy and Environment Partnership grant from Ministry for Foreign Affairs of Finland.
Ireland's state-owned economic development agency Enterprise Ireland has announced the launch of a €750,000 Competitive Start Fund for fintech start-ups. The fund will be directed to ventures using artificial intelligence, machine learning, virtual reality, the internet of things, blockchain and the cloud.
Element Power subsidiary Greenlink Interconnector Limited has appointed engineering professional services firm WSP to provide technical, design and procurement support for its project to provide a 500MW high voltage direct current (HVDC) link across the Irish Sea. Two electricity cables and a fibre optic cable will connect the Great Island substation in County Wexford to Freshwater West beach in Wales. Construction is due to start in 2020 and the project has received funding from the European Commission through the Connecting Europe Facility.
Zsuzsanna Hargitai has taken over as the European Bank for Reconstruction and Development's new Director for the Western Balkans. Based in Belgrade, she will also head the bank's operations in Serbia, where she will succeed Daniel Berg, who is leaving the EBRD after almost 25 years.
Japan will set up a new $50 billion framework to help finance state-of-the-art infrastructure projects in the Indo-Pacific region- in a bid to counter China's growing economic influence.
The Japan Bank for International Cooperation will make investments and provide loans using public and private-sector funds over the next three years.
The African Development Bank (AfDB) has approved a senior loan of $29.5 million and a concessional loan of $20 million from the Climate Investment Funds Clean Technology Fund to Quantum Power East Africa GT Menengai. The funding will support the development of a 35MW geothermal power plant at the Menengai geothermal field in Nakuru County, Kenya, one of three modular geothermal plants in the Menengai field with a combined capacity of 105MW.
The European Investment Bank (EIB) is lending Energiepark Bruck/Leitha a total of €19.3 million to carry out its Bruckneudorf and Höflein West wind farm projects in Austria. The two sites will have a joint capacity of 17MW (6.5 MW for Bruckneudorf and 10.5 MW for Höflein West). The EU bank's loan is backed by a guarantee from the European Fund for Strategic Investments. Erste Bank is also participating in the €27.3 million financing plan.
Mexican development bank Bancomext has agreed a line of credit of up to $50 million from the Nordic Investment Bank in order to finance clean energy and energy efficiency projects.
The agreement will also improve economic and trade cooperation between Mexico and the eight countries - Denmark, Finland, Iceland, Norway, Sweden, Estonia, Lithuania and Latvia - which make up the NIB.
Mexico is seeking for 43% of its electricity to come from clean sources by 2024.
The Asian Development Bank has approved $350 million in additional headroom to further expand the scope and impact of its Trade Finance Program (TFP). The additional financing will increase TFP's limit to $1.35 billion, keeping up with the increasing market demand for trade finance from the program, which grew over 50% in 2017.
Russian state development bank Vnesheconombank (VEB) could receive up to $10.14 billion from the China Development Bank to finance joint projects. "Currently, there are about 70 projects we could co-finance, which would greatly contribute to coordinating integration processes," VEB's newly appointment chairman Igor Shuvalov said.
The European Bank for Reconstruction and Development (EBRD) has arranged a €35 million financing package to the western Ukrainian municipality of Lviv to boost solid waste management.
A 13-year municipally guaranteed loan of €20 million from the EBRD will be accompanied by an investment grant of up to €10 million from the Eastern Europe Energy Efficiency and Environment Partnership, and a €5 million concessional loan from the Climate Investment Funds' Clean Technology Fund.
The funds will be used to support the rehabilitation of the Hrybovychi landfill, and the construction of a municipal solid waste mechanical biological treatment plant in Lviv reducing greenhouse-gas emissions by approximately 141,500 tonnes of CO2 equivalent per year.
The European Bank for Reconstruction and Development is teaming up with China's Risen Energy, a new investor in Kazakhstan's renewable energy sector, for the construction of a new 40MW solar plant in the Karaganda region of the country.
The financing package arranged by the EBRD includes a local currency loan of up to $22 million in KZT equivalent, a loan of up to $5.8 million loan from the Clean Technology Fund, and up to $4.2 million loan from the Green Climate Fund.
The project will mark the EBRD’s first cooperation in the sector and in the country with a Chinese company.
Confidence among small and medium-sized enterprises in Germany dropped again in May - with the protectionist policies of Donald Trump's US government, as well as the formation of an anti-euro government in Italy, dragging business sentiment down further.
Confidence fell by one point to 13.9 balance points. SMEs' business expectations in particular are on the decline and, after a drop of 1.4 points to 2.1 balance points, are now just slightly above their long-term average level. But the current business situation remains on an unusually high level, even if it is seen as slightly weaker than in the previous month (-0.6 points to 26.6 balance points).
"The euphoria is gone and worries are growing," said Dr Jörg Zeuner, Chief Economist of KfW Group.
Germany's KfW will expand its range of promotional products in the fields of innovation and digitalisation. The new KfW Loan for Growth will support the innovation and digitalisation projects of larger medium-sized enterprises.
KfW will also be able to take on a part of partner banks' credit risk for larger medium-sized companies with annual turnovers of up to €2 billion. The lender will take part on the same terms in a debt financing operation of one or more partner banks, covering up to 70% of the project risk through a risk sub-participation. KfW will secure this credit risk in as far as possible through the European Investment Bank by means of a 50% guarantee from the European Fund for Strategic Investments.
The International Finance Corporation is the sole investor of the $60 million green bond issued by Thailand's TMB Bank. It represents the first green bond issued by a commercial bank in Thailand.
The funds will be used exclusively to finance climate-smart projects, particularly renewable energy.
The Asian Development Bank (ADB) will support over $1 billion in energy investments in the Pacific between 2018 and 2021, including 19 projects to help countries in the subregion have better access to quality, affordable, and sustainable energy source, according to the group's new Pacific Energy Update report.
The report highlighted ADB's efforts and partnership with governments, communities, private sector, and other development partners to help improve the availability and quality of clean and affordable sustainable power in the Pacific region. It also provides a country-by-country snapshot of various energy projects and technical assistance, which Pacific governments have prioritized for ADB assistance.
The European Investment Bank has balked at an EU proposal to do business in Iran to help offset US sanctions and save the 2015 nuclear deal - under pressure from the US, where the bank raises much of its funds.
The resistance from the European Union's lending arm underscores the limits of the bloc's ability to shield trade with Iran from the reimposition of US sanctions after President Donald Trump abandoned the nuclear accord last month.
A total of six EU diplomats, EU officials and sources at the bank said that within the EIB there are growing concerns that the European Commission’s plan would imperil its multi-billion-dollar funding program.
The Inter-American Development Bank (IADB), through its private sector institution IDB Invest, has joined forces with Brazilian development bank BNDES to create an infrastructure credit fund for up to $1.5 billion. The fund, initially called B2 Infra, includes about 30% of its resources from BNDES, 10% from IDB Invest and the remainder will be raised together with the private sector.
The focus of B2 Infra is to provide loans to projects in transport, energy, water and sanitation, and social infrastructure, such as health and education.
The Nordic Investment Bank has signed a €150 million, 15-year loan with Finland's largest distribution system operator, Caruna, to strengthen the reliability of electricity supply.
The loan will finance a project to expand the network's weatherproof sections by replacing old overhead lines with underground cables. Old pole-mounted transformers will be replaced with new transformers that are compliant with EU regulations.
Emma Navarro has been appointed Vice President and member of the Management Committee of the European Investment Bank.
She has been General Secretary of the Treasury and Financial Policy in Spain, and member of the Bank of Spain Governing Council and board member of the Spanish National Securities Market Commission.
China Development Bank (CDB) and the National Bank for Foreign Economic Activity of Uzbekistan have signed a $250 million project finance loan agreement.
The loan will finance projects of small and medium-sized enterprises aiming to bring high-tech equipment to Uzbekistan, to set up export-oriented ventures.
The International Finance Corporation and Multilateral Investment Guarantee Agency are set to provide $3 million in financing and $7.8 million in political risk insurance coverage for a new raisin processing plant in Afghanistan to help boost the country's agribusiness sector.
The IFC-MIGA package will help the Rikweda Fruit Process Company develop a state-of-the-art raisin processing plant in Istalif. IFC is providing $3 million in financing to support the project. MIGA is currently in discussions with the investors, aiming to execute the political risk insurance contract shortly.
The International Finance Corporation has announced a $60 million investment in a regional risk-sharing facility to support Bank of Africa Group's lending to small and medium-sized enterprises in eight African countries: Burkina Faso, Ghana, Madagascar, Mali, Niger, Senegal, Tanzania and Togo.
IFC's investment will cover as much as 50% of the risk on up to $120 million equivalent in loans to local SMEs. Half the facility is earmarked for women-run businesses, and for climate-related improvements, such as energy efficient equipment upgrades, small solar or biomass systems, and climate-smart agriculture.
The Nordic Investment Bank made a total of €3,812 million in loan agreements and investments in green bonds in 2017, according to its annual accounts. Of €211 million recorded as a profit of the year, €55 million will be paid out as dividends to the member countries.
The bank also appointed Dana Reizniece Ozola, Minister of Finance of Latvia and the Governor for Latvia, as its Chair for the period from 1 June 2018 to 31 May 2019.
Azure Power has secured India's largest financing for rooftop solar with a consortium of Development Finance Institutions. The International Finance Corporation-led consortium, that includes FMO, Proparco and Oesterreichische Entwicklungsbank AG (OeEB), will supply $135 million of debt financing.
Russia's Vnesheconombank (VEB) has opened its representative office in Abu Dhabi. The office will promote cooperation between the UAE and Russia in exports and investment. The bank's Organisation of Islamic Cooperation export loan and guarantee portfolio stands at $2.8 billion.
The European Bank for Reconstruction and Development, International Finance Corporation, and Dutch Development Bank FMO are joining forces to finance improvements in the electricity distribution network in Turkey's Osmangazi region in western Anatolia.
The EBRD is providing $110 million, IFC $80 million and FMO $65 million to Osmangazi Elektrik Dagitim to finance the upgrade, modernisation and expansion of the distribution network, which serves around 2.7 million people in 194 towns and 1,596 villages.
Neoen, Rekamniar Frontier Ventures and MPC Caribbean Clean Energy Fund have reached financial close on a DFI-backed project financing for the 51MW Paradise Park PV project in Jamaica. Proparco and FMO are senior lenders to the scheme, which has a total investment amount of $64 million. Jamaica Public Service Company is offtaker for the project via a 20-year PPA priced at $85 per MWh. Construction has already begun and commissioning is expected in the first half of 2019.
The Asian Development Bank has approved a $375 million loan for a project that will contribute to doubling farming incomes in the Indian state of Madhya Pradesh by expanding irrigation networks and system efficiency.
The project will focus on two large irrigation systems. The first - the Kundalia irrigation project - will develop 125,000 ha of new and climate resilient irrigation network. The second will prepare a comprehensive modernisation feasibility study and other preparatory work for the Sanjay Sarovar Irrigation Project.
The total project cost is $535.1 million, of which $160.7 million will be provided by the government.
The European Investment Bank has agreed a new €30 million financing initiative with Cyprus' RCB Bank to boost financing to small and medium-sized enterprises. Cypriot companies will benefit from longer term loans and favourable rates.
The International Finance Corporation has announced a $10 million subordinated loan to I&M Bank (Rwanda) to strengthen the bank's capital base, and help it increase lending to small and medium-sized enterprises.
IFC's investment will focus on supporting smaller businesses operating in Rwanda's tourism, agriculture, and trade and commerce sectors, the backbone of economic growth in the country.
The European Bank for Reconstruction and Development and the Global Centre of Excellence on Climate Adaptation (GCECA) have published a new report on physical climate risk, providing recommendations for firms to integrate climate impacts into investment decisions.
"Advancing TCFD guidance on physical climate risks and opportunities" highlights how firms should perform forward-looking risk assessments and disclose material exposure to climate hazards, such as flood risk, water stress, extreme heat, storms, and sea level rise. It also recommends that companies use scenario analysis and incorporate long-term climate uncertainties into business planning and strategic decisions.
The recommendations are based on analysis conducted by working groups, which included representatives from AFD, Allianz, APG, Aon, Bank of England, Barclays, BlackRock, Bloomberg, BNP Paribas, Citi, Danone, DNB, DWS, The Lightsmith Group, Lloyds, Maersk, Meridiam Infrastructure, Moody's, the OECD, S&P Global, Shell, Siemens, Standard Chartered, USS and Zurich Asset Management.
The Japan Bank for International Cooperation has signed an agreement with Sberbank of Russia for an export credit line totaling up to JPY30 billion to finance Japanese exports to Russia and its neighboring countries, including the countries of the Commonwealth of Independent States and Central Asia.
Sberbank will provide medium and long-term financing in Japanese yen to companies with potential business opportunities in Russia, particularly in the areas of infrastructure and energy.
The International Finance Corporation has issued its inaugural bond in Uzbek Soum, raising 80 billion Uzbek soums - $10 million equivalent - to expand lending for micro, small and medium-sized enterprises in Uzbekistan. It represents the first Uzbek Soum-denominated transaction issued in the international markets.
The two-year bond was placed with European asset managers dedicated to emerging markets, with the deal arranged by ING Bank.
Tokyo-headquartered Mitsubishi Corporation has been awarded a contract for a Japan International Cooperation Agency-financed port construction in Iraq. The contract covers a port rehabilitation project in the country's southern region of Basra, and is valued at approximately $110 million.
The project will be carried out through a partnership between Mitsubishi Corporation and various international contractors, including Turkey-based energy infrastructure provider Calik Enerji.
Latin America and the Caribbean could add an additional $11 billion in annual trade flows by blending 33 separate agreements into a single regional free trade bloc, according to a study by the Inter-American Development Bank (IADB).
Argentina, Mexico and Brazil would be the key players in any meaningful integration effort, the report - called Connecting the Dots: A Road Map for a Better Integration of Latin America and the Caribbean, available here.
As foreign currency debt issuance reaches a new record so far this year, there are growing concerns over debt servicing sustainability across Africa. Several African economies are at serious risk of debt distress and there are increased foreign-exchange and refinancing risks – partly driven by use of non-concessional financing and foreign-currency borrowings.
The European Investment Bank has offered preparatory technical assistance from its own funds to get Egypt's Kafr El-Sheikh Wastewater Expansion project started. The lender said adding further technical assistance, to be financed through grants, is likely. The project’s total cost is estimated at €163.5 million, of which the EIB will provide €77 million, while the EU Neighbourhood Investment Facility is providing €15 million.
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