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The International Finance Corporation (IFC) and Equity Group have signed an agreement on sustainable development of Africa through supporting micro, small and medium sized businesses (MSMEs), including climate-smart businesses.
This also includes IFC and IFC Financial Institutions Growth Fund acquiring a minority shareholding stake in Equity Group.
The partnership has seen IFC and its partners, namely, the Dutch Development Bank (FMO), British International Investment (BII) and Symbiotics, ResponsAbIility from Switzerland commit $165 million towards Equity’s Africa Recovery and Resilience Plan that will see the Group, through its regional banking subsidiaries, finance at least five million MSMEs and 25 million households, thereby creating 50 million jobs.
The facility of $165 million includes $50 million from IFC, $50 million from British International Investment (BII) and $65 million from Symbiotic, Responsibility and FMO, the Dutch entrepreneurial development bank and a long-time shareholder in equity through Arise Investments.
IFC and the IFC Financial Institutions Growth Fund acquired a 6.71 per cent stake in Equity Group, East Africa’s largest banking group.
The investment is IFC’s first in Africa that aligns with the corporation’s approach to increase green equity investments in financial institutions.
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 percent of energy or revenue 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 $80 million equity towards climate related interventions covering subsidiaries over the next five years.
