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, responsAbility from Switzerland commit USD 165 million (approx. Kes 19 billion) towards Equity’s ‘Africa Recovery and Resilience Plan’ that 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.
Further to the agreement signing, IFC and the IFC Financial Institutions Growth Fund acquired a 6.71 % stake in Equity 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% 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. Further, Equity Group has agreed to allocate USD 80 million equity towards climate related interventions covering all subsidiaries over the next 5 years.
Speaking during the partnership signing ceremony last month, Equity Group Managing Director and CEO Dr. James Mwangi said, “As Equity Group, we are delighted to welcome IFC, a member of the World Bank Group to the Equity family as our 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 catalysing 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.’
Equity’s ‘Africa Recovery and Resilience Plan’ has been 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.
On the economic engine, the Group will leverage on its regional footprint, strong financial capability, and brand trust to accelerate Africa’s growth by supporting MSMEs and driving their inclusion into formal value chains, championing access to trade and investment opportunities, leveraging on the region’s productive capacities to catalyse the growth of manufacturing and logistics and promoting investment in agriculture and renewable energy by businesses.
This new agreement with IFC is the second one within a period of one year that Equity Group has entered into following the signing of a USD 50 million credit facility to EquityBCDC aimed at providing additional local currency loans to underserved MSMEs in the DRC cushioning MSMEs in the country from currency fluctuations.
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