How can you participate in the “African Belt & Road” project?

Some of the largest conglomerates on the planet have already contracted to participate in what is poised to be the largest master planned affordable housing, power, logistics and job creation project in Sub-Saharan Africa.

The centre point from which all infrastructure projects evolve, the www.AfricanBeltAndRoad.com is an initiative to connect West Africa to East Africa by rail and beyond by sea.

The www.TransAfricanRailway.com route is from Mombasa to Nigeria with spurs from Cameroon to Angola and from Nigeria to Ghana. The African Belt and Road is the foundation upon which www.innohabitat.com is establishing the world’s first chain of Branded Affordable Townships with Dry Port Free Trade Zones and integrated Solar Farm Power Plants in capital cities along the route.

Voids along the railway route are linked by www.RoadRail.org off-road road-train and the route is intended to be extended by sea and air. Passenger & Cargo logistics by sea is via www.SeaRail.org high speed wave piercing ferry from Nigeria to Senegal and by low cost airline to international markets via www.AirRail.uk.

Contracts have already been signed with multi-billion dollar corporations such a power conglomerate to provide 100% foreign investment to build twenty power plants in addition to the railway, construction, hotel chains and Free Trade Zone industries.

Phase One, the $13 Billion SGR Railway from Mombasa to Nairobi was completed in 4th Qtr 2017. Innohabitat has completed a pre-feasibility on a 3,000 acre mega logistics township at Voi, which is poised to be the main clearance facility for Mombasa Port to Nairobi and is to be the junction to extend the Trans African Railway network to Tanzania and beyond.

The new logistic Hub at Voi connects to the new East Africa railway system which includes Tanzania, Burundi, Rwanda and Uganda with connections to Zambia, DRC, South Sudan, Ethiopia and Somalia. The route continues through Central African Rep., Cameroon and Nigeria with connections from Cameroon to Equatorial Guinea, Gabon, DRC and Angola and from Nigeria to Benin, Togo and Ghana.

The African Belt and Road is expected to be the largest skills training and job creation initiation on the continent and is issuing a challenge to Corporations and the ECOWAS Governments to attend the Africa Impact Investing Leaders Forum 2018. The objective is to engage in workshops designed to produce a result, during which participants work together to realise proposed projects.

One such example is Searail, the objective of the workshop is to establish terminals at strategic locations along the coast from Nigeria to Senegal. Searail is intended to operate a fleet of RoPax Wave Piercing Catamaran High Speed Ferries. The vessels are capable of operating comfortably in ocean wave conditions and carries 700 passengers and 181 cars at speeds of 40 knots. Featuring bow and stern ramps for fast and efficient loading and unloading.

The service commences at Lekki Free Zone, the route includes Ikorodu, Victoria Island, Daddo Terminal (Nigeria), Cotonou (Benin), Lome (Togo), Tema, Cape Coast & Takoradi (Ghana), Abidjan & San-Pedro (Cote dIvoire), Harper & Monrovia (Liberia), Freetown (Sierra Leone) Conakry (Guinea), Bissau (Guinea Bissau), Banjul (Gambia) and Dakar (Senegal) and return in addition to personnel and freight services to the oil rigs.

Searail is designed to be a viable commuting preference to air and road travel in addition to cross border freight haulage for the transport industry. The objective is to dramatically improve the time, efficiencies and costs for the movement of commodities to significantly stimulate trade in the region.

The master planning of the African Belt and Road also includes the implementation of last mile deliveries to ensure a holistic solution. www.CollectDepot.com provide mini low cost warehousing facilities in rural locations to receive online and offline parcels for collection or delivery.

Last mile deliveries are performed by www.innocourier.com utilising specially designed low-maintenance, off-road delivery vehicles. InnoCourier has conceived a unique structure to form teams of four single mothers where one drives, one child minds, one markets and one has free time for chores. 74 Branch Depot locations have been identified in Ghana providing opportunity for 14,208 single mothers.

The mechanism for funding is already in place through the www.Buy2Lease.comRemittance Alternative which provides an innovative high yield return on long term monthly remittance payments to beneficiaries. The volume of conventional domestic remittance in to Ghana is currently $2,000,000,000 per annum.

The Buy2Lease mechanism is leveraged through www.Equity2Own.uk to facilitate larger volumes of participation. Equity2Own, which is also provided by www.CentralLondonCapital.co.uk enables Diaspora to acquire new property in Ghana at a significant 33% discount. The mechanism and the discount is being well received by Diaspora in the UK, EU & USA.

Read more →

Scaling up climate investments will require innovation in five key areas

Just ask the investors: businesses in emerging markets can no longer afford to ignore the risks posed by the changing climate to their bottom lines. Ranging from increasingly frequent and severe weather events to new regulations and changing consumer preferences, climate change is fundamentally transforming the way we do business. Increasingly, companies and their investors are seeking opportunities to transition to and invest in climate-smart portfolios.

By all accounts, engaging the private sector in climate-smart investments will be a cornerstone to growing climate business. In many sectors they already play a large role, supplying nearly a third of global investment in research and development of new renewable energy technologies, or $2.5 billion in 2016 alone. Scaling these technologies up to meet targets set in the Paris climate agreement, however, will require trillions more in innovative climate-smart investments particularly in emerging markets. And this presents us with opportunities. In fact, IFC estimates that 21 developing countries alone hold over $23 trillion in climate-smart investment opportunities through 2030.

The time to capitalize on these opportunities is now. In the words of Michael Bloomberg and Carl Pope, from their recent book, Climate of Hope: “… We believe that by changing the way we think and talk about climate change, we can lower the temperature of the debate – and accomplish a whole lot more.”

And this captures very well what IFC is all about — creating markets, creating and supporting businesses that are financially and environmentally sustainable, and through that, making a difference. Closing off a successful fiscal year in 2017, IFC committed close to $4.8 billion from its own account and mobilized funds from other investors in climate-smart industries, helping scale up climate investments in 41 emerging markets. While these industries are all showing promise, there are five sectors where, based on our experience, innovative approaches are poised to widen the tent, attracting billions in private sector capital.

Unquestionably, meeting future demand for food will be one of the world’s greatest climate-related challenges. The human population is projected to grow from 7.3 billion as of 2015 to 9.7 billion by 2050. Without robust steps to increase productivity and climate resilience of agricultural practices, business-as-usual is expected to reduce global agriculture yields by up to 50 percent by 2030. Fortunately, businesses are beginning to employ climate-smart agriculture measures that can dramatically increase productivity and resilience while reducing greenhouse gas emissions. IFC is focused on helping scale these practices by providing investment and support for specific agribusiness needs, including increasing productivity of animal protein producers, optimizing inputs through precision agriculture, and reducing food waste through investments in logistics and infrastructure.

Another significant impact of global population growth will be the rapid growth of urban environments which will exert pressure on existing building stocks. Buildings are estimated to be responsible for about one third of global greenhouse gas emissions.

This challenge also creates an opportunity for climate-smart investment in green buildings. To help private lenders understand and engage in this opportunity, IFC is helping promote a universal and accessible green performance standard to identify areas for cost savings in buildings. The IFC EDGE program offers developers and investors a free tool to choose options to reduce consumption of energy, water, and extracted materials in new and existing building stock.

As global population and incomes rise, 70 percent of developing country populations are expected to live in cities by 2050. This opens doors for opportunities to build “smart” cities, capable of sustainably meeting demand for infrastructure in urban environments, and private sector interventions are now dramatically changing urban landscapes. In the United States, ride sharing services such as Uber and Lyft are reducing car ownership in cities, which can subsequently reduce congestion and greenhouse gas emissions. IFC is investing in public-private partnerships in Turkey to expand metro rail services and in India to upgrade street lighting networks.

Read more →

UN Sustainable Development Goals open the door to more impact investing

The UN Sustainable Development Goals (SDGs) agreed in September 2015 are causing an uproar in the world of responsible investment. These are the 17 SDGs that were agreed and adopted by world leaders as the means to mobilise all efforts to end poverty, fight inequalities and climate change while ensuring that no one is left behind. While the goals are not legally binding, governments are expected to take ownership and put in place specific frameworks for their achievement.

One of the stamps of approval to this framing of important social and environmental issues has come from the investment world, including major institutional investors such as Dutch pension funds now proclaiming that a major portion of their assets will require investment returns as well as a direct link to specific SDGs.

Mainstreaming ESG and impact investing

This endorsement by major global investors is laudable. In our view it represents another clear example of the mainstreaming of ESG (environmental, social and governance factors) and impact investing. However, it also presents a direct risk for cynicism by the beneficiaries of their assets if investors dilute the SDGs too much in their approach in order to link their investments to specific outcomes.

Therefore, we applaud and at the same time remain cautious as we look across asset classes and how to best link them to the specific goals identified by the UN. The most tangible asset classes to achieve demonstrable social and environmental outcomes thus far have been in alternatives as evidenced by green real assets or social impact investing in private equity.

Growing investor demand further driven by the SDGs

While impact investing and SDGs are still new on the horizon, investor demand is quickly growing and moving into larger, more liquid asset classes. For example, green bonds have provided larger tickets and liquidity for the measurement of SDGs such as Clean Water (6), Clean Energy (7) and Climate Action (13). The direction of travel is clear and the next phase of responsible investment evolution is impact investing.

The traditional area for ESG investors has been in public equities. For impact investing, it has been in alternatives. The demand for SDGs in public equities is now starting to emerge and will bridge these two worlds. In order to maintain integrity, products and services should be considered that go beyond a simple analysis of a carbon footprint compared to a benchmark. This will become the standard for client expectations, but will not necessarily meet the needs of sincerity around SDG outcomes.

SDGs create a doorway to impact investing in public equities

Two illustrations come to mind in how to make public equities relevant around SDGs and in line with an impact investing philosophy. If we take quantitative equity, one can imagine a portfolio construction process which focuses on holdings that can demonstrate how they are contributing to a lower carbon future through their products and services and business operations. Metrics such as carbon emissions saved and green share of portfolios can be used for this analysis. These are steps to demonstrate that it’s not just business-as-usual portfolio construction, and not just about following a low carbon index. This is active portfolio management towards an SDG outcome while ensuring financial returns.

Kathryn McDonald, Head of Sustainable Investing at AXA IM Rosenberg Equities, commented:  “We believe that publically traded equity investing can act as complement to traditional impact investing. The breadth of the publically traded market, and the capacity offered by quantitative equity investing in particular, allows asset owners to put significant AUM to work to really move the needle on impact goals.

“Looking carefully at several of the SDGs, we believe that we can build targeted, listed equity portfolios that speak directly to specific investor goals. Importantly, compelling financial returns are a must – without those investors will not stick with ‘listed impact’ approaches for long.” Read more →

Changing climate is already changing us: Are we prepared?

The tragedy that comes with the change in climate that caused landslides and flooding recently hit Sierra Leone, one of the jewels of Africa. What can we learn from this moment of pain?
Let’s put things into perspective. In Sierra Leone – and across Africa – the science is unequivocal: Climate change is a contributory factor, alongside man-made elements like deforestation and encroachment, to the kind of disaster that hit Sierra Leone in August 2017. This is no longer an abstract issue.

According to the US National Weather Service’s Climate Prediction Center, Sierra Leone received an unprecedented amount of rainfall this year – three times the normal seasonal rainfall. Such torrential rains are a clear sign of the changing climate. In August 2017, at the height of the rainy season, Freetown received an unprecedented average of 539,9mm of rainfall. With its land size of 356,9km2, Freetown had an average of 190 million cubic meters of rain water to drain. This extreme volume of water, combined with human factors like encroachment on natural environment such as creeks and wetlands, which are the natural drainage and storage systems for flood waters, as well as construction on flood-prone areas and inefficient drainage systems, among other factors, cumulatively precipitated this disaster.

In early 2017, new data from the UK Met Office, the United Kingdom’s national weather service, and the US National Aeronautics and Space Administration (NASA) show that the earth’s temperature has increased to about 1,1°C above pre-industrial levels. This is dangerously close – just 0,4°C away – from the 1,5°C threshold set by the Paris Climate Change Agreement to prevent the worsening effects of climate change. At this rate, the vulnerability of Africa’s coastal cities is unprecedented. Sea level rise is projected to hit coastal cities – 14% higher than the global average by 2100 for the fast approaching over 4°C warming scenario. The impact will stretch far and wide beyond Freetown to expose millions to risk of flooding. By 2050, high numbers are projected in coastal cities of Mozambique (5million), Tanzania (2million), Cameroon (2million), Egypt (1million), Senegal (0.5million), and Morocco (0.5million). Such flooding will reverse economic and development gains with the ensuing health impacts and damage to infrastructure, loss of tourist sites and disruption in food supply. It will also expose the populations to elevated food prices, loss of livelihoods and strife.

As far as ecosystems degradation is concerned, Africa loses up to USD68 billion annually. This means that the continent’s natural buffer against such impending climate change effects is being lost at a rate of about USD180 million daily.

The science is clear. The escalating climate change knows no boundaries, and this is coupled with an increasingly degraded environment. Countries across Africa need to urgently address these dual challenges if we want to forestall similar disasters in future.

This is the logic behind the universal, global response to climate change that has been called for under the Paris Agreement. Sierra Leone, classified as the third most vulnerable country to climate change, stands to benefit from being part of this global collective action – and it is among the countries that have ratified the Paris Agreement, demonstrating its resolve to combat climate change. In fact, Africa as a whole has shown global leadership in responding to climate change.

The good news is that practical solutions have been successfully applied across Africa. In Rwanda’s Geshwati area, a land suitability and use map is informing policy decisions to relocate vulnerable communities from previously encroached natural environments and high-risk areas to safer habitation areas. Considering that agriculture is the backbone of these communities, this plan is also informing on ecosystems-based adaptation (EBA) agriculture techniques that the communities can safely engage in for their livelihoods without degrading the area. Simultaneously, the plan is guiding the restoration of previously degraded catchment areas using EBA techniques like agro-forestry and the planting of indigenous trees, among others, to stabilize soils and slopes and to regulate flood waters. This has eradicated landslides that were once a common phenomenon in the area.

A similar two-pronged strategy has been successfully applied to build resilience in Mozambique’s coastal communities that were highly vulnerable to coastal flooding. For example, an investment of USD120 per person to rehabilitate depleted mangroves and establish crab farming restored mangroves. These have become natural buffers against coastal flooding while simultaneously preventing future encroachment by providing alternative livelihood activities away from the mangroves. Read more →

Africa’s Green Bonds: A Way to Finance the Future

International finance associations, the European Investment Bank and the World Bank Treasury issued their first green bonds in 2007 and 2008 respectively. The issuance of the green bonds provided investors with liquid, fixed income investment options that supported climate-focused and environmentally friendly projects.

The Main Objectives

Among other goals, such projects aim to achieve biodiversity conservation, sustainable water management, and clean transportation. The market reached a turning point in 2013 as the first corporate green bonds were issued, increasing the market size to $11bn. In 2016, over $81bn in green bonds were issued, driven in part by an increase in issuers, issue types, structures and investment vehicles.

Moody’s suggested that the global green bond issuance may rise to approximately $208bn in 2017.

This is indeed a very likely outcome as the expansion of green bond types and structures continues to attract multiple potential issuers, including China. The country is expected to contribute around $60bn in green bonds issued in 2017.

Other Players

In recent months, France and Poland became the first countries to issue sovereign green bonds. Countries likely to follow suit in 2017 include Bangladesh, China, Luxembourg, Morocco, Sweden, and Nigeria. Africa’s powerhouse, Nigeria, plans to be one of the first African states to float sovereign green bonds to fund sustainable projects in the economy.

At the Green Bonds Capital Market & Investors Conference, the acting President of Nigeria, Professor Yemi Asinbajo, stated that arrangements were being made for the inauguration of the first African Sovereign Green Bond, worth some 20 billion nairas, to address climate change and environmental projects.

Some of the projects to be financed include a solar unit distribution program for 20 states of the federation and a reforestation program for 26 states. With solar power becoming the world’s cheapest source of energy for electricity, this presents opportunities for investments and diversification, which could cut significant costs for organisations as the nation works towards bouncing back from recession. Whether or not the green bonds will be oversubscribed may depend largely on incentives and regulation of the bonds.

Putting the Money to Good Use

In November, Masen (Morocco’s Agency for Sustainable Energy) issued Morocco’s first ever green bond of €106m. The proceeds from the bond issue will be used to finance the development of 170 MW in the NOOR PV1 project, providing solar power through three plants.

Other African states, including Kenya, are gearing up to take be active in the green bond markets as they work towards supporting the 2015 pledge by world leaders to limit global warming to below 2 degrees Celsius this century.

A Positive Outcome

Apart from potential tax incentives, African states may be able to achieve more sustainable growth in relatively early stages of development in contrast to more developed states. The introduction of the issuance of green bonds increases the priority for sustainable development on the continent, thus encouraging African countries to avoid the mistakes (in sustainable development) that developed economies made in their infancy.

A potential challenge for African states hoping to attain finance for funds through green bonds is the size of the projects and their financing needs. The size of the projects may need to be increased in order to ensure that they are more attractive.

Although the issuance of green bonds is growing fast, it is still less than $1trn, a tiny fraction of the $90trn global bond market. OECD studies suggest that the global annual green bond issuance will need to rise by between $620bn and $720bn for the G20 to meet its climate change targets. Read more →