NDF - Financing for climate change and development projects

Green Finance in Africa Gets a Boost

From left to right in the front row, NDF Managing Director Pasi Hellman, AGF CEO Felix Bikpo and AGF Chairman of the Board of Directors Andrew Temu, together with colleagues gathered for the signing ceremony. Photo: Shameem Sobha
From left to right, NDF Country Manager Charles Wetherill, AGF CEO Felix Bikpo and NDF Managing Director Pasi Hellman formalize the partnership. Photo: Jean N'Sele.

NDF joins the African Guarantee Fund (AGF) to support African small and medium-sized enterprises (SMEs) investing in green growth and climate resilient development.

NDF joined the group of shareholders of AGF today during a meeting of the AGF Board of Directors in Mauritius. NDF will contribute EUR 6 million in equity and an additional EUR 1.6 million in grant support for technical assistance to establish a green guarantee facility (GGF) under AGF management.

Establishment of the new facility captures momentum from the 2015 Paris Climate Agreement and introduces a specialized, green finance instrument bringing together the NDF climate finance mandate with the AGF mission to strengthen access to finance for African SMEs and build capacity of African banking institutions.

NDF Managing Director, Pasi Hellman, and Country Program Manager, Charles Wetherill, joined AGF CEO, Felix Bikpo, in signing the agreements formalizing NDF’s shareholder status. Representatives from AGF’s existing shareholders including the African Development Bank (AfDB) and the governments of Denmark and France witnessed the event. A representative from the government of Sweden was also on hand as an observer.

Mr. Bikpo, AGF CEO, welcomed NDF, saying “the arrival of a leading Nordic climate finance institution is a vote of confidence for us at AGF. This is a signal to our partner lending institutions that green SMEs are the big business of tomorrow. African banks and SMEs together can be leaders in the race against climate change putting Africa on the path of sustainable growth.”

“This partnership captures the spirit of climate finance innovation at the core of the new NDF Strategy,” Mr. Hellman reflected, adding, “We are pleased to be putting climate at the forefront of AGF operations and look forward to seeing our resources leveraged into investments in renewable energy and energy efficiency, cleaner production, climate smart agriculture and natural resources management and green services bringing positive and sustainable development impacts across the continent.”

GGF will be managed and administered by AGF. Initial roll-out efforts will target SMEs in Kenya, Zambia, Cote d’Ivoire and Ghana. NDF resources are expected to be fully committed within 3 years, catalysing more than six times the value of NDF equity in the form of new bank loans for SMEs investing in green growth. The impact of these investments will be felt in households, communities and economies across the continent through growth of green jobs, incomes and quality of life.

AGF was established to promote access to finance for SMEs in Africa through provision of partial loan repayment guarantees. It is owned jointly by the AfDB and the governments of Denmark, Spain and France and was officially launched in 2012 in Arusha, Tanzania by the then President of the AfDB, Donald Kaberuka. It is headquartered in Mauritius and manages its operations out of Nairobi.

Since its launch, AGF has grown its operations to 35 countries in Africa, transacted more than $200 million in signed guarantees with more than 60 partner banks and established a widely-recognized brand and business model. In 2013, it was named Best SME Finance Company in Africa by the International Finance Magazine and Best Financial Institution for Financial Inclusion in Africa at the annual African Bankers’ Awards.

AGF’s achievements have opened up access to finance for more than 1000 SMEs, translating into more than 11,700 new jobs, sustainable incomes for thousands of households and a growing tax base across the continent.

More information

African Guarantee Fund Green Guarantee Facility [NDF C88]
African Guarantee Fund