Published: July 18, 2012
Funds managed by the IFC’s asset management arm will take a 7.2% stake in African lender.
Pan-African institution Ecobank has received a US$100mn investment from the asset management arm of the International Finance Corporation (IFC).
IFC Asset Management Company has made the investment in Ecobank Transnational Incorporated (ETI), the parent group of the bank, to help Ecobank strengthen its capital base and expand its offerings in the 32 countries in which it operates.
The money comes from three funds managed by IFC Asset Management Company – the IFC Capitalization Fund (IFC Cap Fund), the IFC African, Latin American and Caribbean Fund (IFC ALAC Fund), and the Africa Capitalization Fund. The funds will take a combined equity stake of about 7.2% in ETI.
The IFC has been a shareholder in ETI since 2009, when it converted a US$100mn loan into an equity stake of 9.2%. IFC Asset Management Company funds have also invested in the group previously – in June 2010, IFC Cap Fund and IFC ALAC Fund committed US$150mn in loans, with half the amount convertible into equity.
“Our relationship with ETI continues to grow and this transaction is a crucial step in IFC’s strategy of improving access to finance in Sub-Saharan Africa,” said Rashad Kaldany, the IFC’s acting CEO and executive vice-president.
“It will enable ETI to increase lending to underserved market segments, such as agribusiness, micro, small, and medium enterprises, and climate change. It will also promote trade and integration, and generate employment where it is needed most.”
Ecobank has raised new funds from several sources this year. In July it secured a €40.7mn (US$50mn) loan from French development bank Proparco and the Belgian Investment Company for Developing Countries. In April it received a US$250mn investment from South Africa’s Public Investment Corporation.