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Global investors to increase stake in Africa

Business Maverick

CONTINENTAL BOOST

Global investors to increase stake in Africa

(Image: Adobe Stock)

Global investment into Africa is poised to grow exponentially and technology giant Google is determined not to miss out, kicking off with a $1bn investment over the next five years.

A study by Standard Bank and the ValueExchange, with the Bank of New York Mellon, Africa Venture Capital Association, South African Venture Capital Association, Global Custodian and MiDA, shows that global investors plan to significantly increase their African investments with 76% either studying the markets or preparing for entry.

According to the World to Africa report, investing in Africa is already a core activity for almost half of all global investors, particularly those in Europe. A further 36% of global investors are planning to enter African markets, either through planned market entries or account activation in the region.

The appeal of Africa as an environmental, social and governance (ESG)-friendly destination is also driving increased interest. 

“In Africa, we see significant opportunities for global investors to support Africa’s long-term growth through investments in greenfield projects that drive financial inclusion and social benefits as well as investment returns,” says Hari Chaitanya, the head of investor services for Africa regions at Standard Bank.

A clear example of one such ESG investment is the Kodeni Solar power plant in Burkina Faso. With an annual production of 73,000 MWh, the power plant is expected to provide clean, affordable energy to nearly 115,000 homes. It will also reduce the country’s dependence on fossil fuels and prevent the emission of 41,000 tons of CO2 each year, helping Burkina Faso to address climate change.

The project was undertaken by Africa REN with the support of the Seed Capital Assistance Facility, an initiative from the United Nations Environment Programme, which co-financed the project development phase. FMO, the Dutch entrepreneurial development bank; Access to Energy Fund (a fund managed by FMO on behalf of the Dutch government); and the Interact Climate Change Facility, a joint facility of the Association of European Development Finance Institutions, provided the long-term debt. 

Huub Cornelissen, energy director at FMO, said Kodeni Solar is one of the bank’s investments in Burkina Faso, “where we feel… there is tremendous opportunity in the renewables sector.” FMO is putting in an investment of €11.97-million at the plant.

Meanwhile, Google recently announced that it will award $500,000 in grant funding and training to non-profit organisations Gift of the Givers and Food for Life South Africa to support them in their economic work.

africa global investment
Google South Africa country director Dr Alistair Mokoena. (Photo: Supplied)

“To date, 22 South African non-profit organisations have tapped into $6.5-million in Google.org grants to bolster their work supporting under-served black youth, SMMEs, and women with skills and knowledge to improve their livelihoods,” says Dr Alistair Mokoena, country director at Google South Africa.  

In a bid to unlock job opportunities and drive entrepreneurship, the Google for Start-ups Black Founders Fund in Africa has selected a new cohort of 50 top black-led technology start-ups in South Africa and across the continent. 

The startups will receive $50-million in funding to help spur their growth as part of a broader Africa Investment Fund plan launched last year. Carry1st, a leading mobile game publisher, is one of the start-ups that has already received equity investments. Carry1st will use the additional capital to expand its content portfolio; grow its product, engineering, and growth teams; and acquire new users. Africa is the fastest-growing mobile gaming market in the world, with a population of 1.3 billion and an average age of 19.

Another investment priority for Google is the SMME sector. Google, with the Department of Small Business Development, plans to provide support, training and resources to small enterprises through the newly launched Hustle Academy. The minister for small business development, Stella Ndabeni-Abrahams, notes that digital markets and digital transformation are important enablers for a transformed and inclusive economy. 

In the coming months, Google, in collaboration with Kiva and a local financial (as yet unnamed) service provider, will be disbursing $3-million in interest-free loans to qualifying small businesses in South Africa. DM/BM

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