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Chuks Udo Okonta
The facility will increase lending to businesses in Sierra Leone where access to finance is limited, support local currency lending and provide longer-term loans which are generally unavailable.
It demonstrates BII’s ability to act as a first mover in frontier markets, navigating risk and working with partners to create impact.
This is the first investment under the Africa Resilience Investment Accelerator (ARIA) which was created by BII.
London, United Kingdom, 7 October 2024: British International Investment (BII), the UK’s development finance institution and impact investor, today announced a $25 million risk sharing facility with Ecobank Sierra Leone to boost private sector growth in high-impact sectors of the economy. The risk sharing facility, which includes a comprehensive technical assistance programme, will support Ecobank to increase lending to ambitious businesses in a frontier market where economic growth is hampered by lack of capital and investment.
The private sector is crucial to Sierra Leone’s economy and mainly comprises small and medium-sized enterprises (SMEs) who provide employment for about 70 per cent of the population. However, they struggle to gain access to capital due to various factors including limited availability of suitable financial products, high collateral requirements, high interest rates and the prevalence of short-term loans.
The new facility will support local currency lending, demonstrating BII’s ability to act as the first mover in frontier markets and drive impact through pioneering risk navigation strategies. The investment will help Ecobank Sierra Leone to grow its loan book by increasing credit limits and extend lending tenors to up to five years, which are not otherwise available in the market. This is expected to boost business growth, create more jobs and increase private sector contribution to Sierra Leone’s economy.
The transaction marks a significant milestone as the first investment under the Africa Resilience Investment Accelerator (ARIA), which is a collaborative initiative launched by BII and co-funded with FMO, the Dutch entrepreneurial development bank, to boost investment in frontier markets such as Sierra Leone.
The Sierra Leone economy faces challenges including a depreciating currency driven by high inflation, a large trade deficit due to over-reliance on imports, and insufficient investment in infrastructure and services. BII’s investment aims to spur economic growth and development by targeting critical sectors including renewable energy, agriculture, agro-processing, infrastructure and manufacturing.
The announcement builds on a $50 million trade finance facility between BII and Ecobank in 2021, which helped the bank to deepen its reach across Africa and support supply chains in frontier markets such as Burkina Faso, Chad and Togo.
UK Minister for Development, Anneliese Dodds said: “I am delighted to see BII announce this new risk sharing facility with Ecobank Sierra Leone. This agreement will support local currency lending, bringing much-needed capital into sectors with a high development impact, thereby contributing to job creation and economic growth. This is yet another example of BII innovating to address risks and enable development in frontier markets.”
Samir Abhyankar, MD and Head of Financial Services, BII, commented: “The signing of this agreement with Ecobank Sierra Leone underscores BII’s pioneering role to lead investments in countries that are often overlooked by investors. The facility will be a game-changer for Sierra Leone, providing much-needed capital for ambitious local businesses to accelerate their growth, spur job creation and deepen impact. It’s an example of BII innovating and working with partners to help address pressing challenges where it matters the most.”
Sebastian Ashong-Katai, Managing Director, Ecobank Sierra Leone, said: “We are delighted to have secured the support of British International Investment in boosting Ecobank’s vital lending capacity for Sierra Leone businesses who are the engine room for our country’s growth, economic development and employment. This further strengthens our intent to be the bank of choice for Sierra Leone’s businesses and leverages our delivery of world class products, services, solutions, borderless digital pan-African platform and business skills training which are designed to support them in further growing their businesses.”
Alex Kucharski, BII’s Head of West Africa for ARIA, added: “ARIA aims to unlock investment in Sierra Leone, a market full of potential. We are delighted to have enabled the investment by British International Investment into Ecobank Sierra Leone, which will bring much needed growth capital to underserved businesses in the country, showing that more investment is possible.”
-ENDS-
Notes to editors
For media inquiries please contact:
British International Investment
Paschorina Mortty: press@bii.co.uk | Tom Collins: bii@africapractice.com
Ecobank
Christiane Mbimbe Bossom: groupcorporatecomms@ecobank.com | Tel: +228 22 21 03 03
Sheikh Omaru Jalloh: sojalloh@ecobank.com | Tel: +23288141418
About British International Investment
British International Investment is the UK’s development finance institution and impact investor. As a trusted investment partner to businesses in Africa, Asia, and the Caribbean, BII invests to create productive, sustainable, and inclusive economies in our markets. Between 2022-2026, at least 30 per cent of BII’s total new commitments by value will be in climate finance. BII is also a founding member of the 2X Challenge which has raised over $33.6 billion to empower women’s economic development. The company has investments in over 1,580 businesses across 65 countries and total net assets of £8.5 billion. For more information, visit: www.bii.co.uk | watch here. Follow British International Investment on LinkedIn and X.
About Ecobank Sierra Leone
Ecobank Sierra Leone is an affiliate of the Ecobank Group, the leading private pan-African banking group. Ecobank Sierra Leone offers a comprehensive suite of financial services and solutions to our Consumer, Commercial, Corporate and Investment Banking clients. The bank’s leading channels are our state-of-the art mobile banking and internet banking platforms. We also support physical channels with an appropriate network of branches, ATMs and agencies known as Xpress Points. The Ecobank Group was established in 1985 to drive financial integration and socio-economic development in Africa. With a presence in 35 sub-Saharan African countries as well as in France, the UK, UAE and China, the Group has unrivalled expertise and experience across Africa. Our unique pan-African platform provides a single gateway for payments, cash management, trade, and investments across Africa and beyond.
About ARIA:
The Africa Resilience Investment Accelerator (ARIA) is an initiative founded by BII and FMO which aims to unlock investment in frontier markets across Africa. It currently operates in Sierra Leone, Liberia, Benin, DRC and Ethiopia. ARIA supports BII and FMO as well as other development finance institutions to increase investment in the markets of focus. It works closely with companies on-the-ground to enable them to become investment ready, helps build investment ecosystems, and engages governments and donors. In Sierra Leone, ARIA has a partnership with the British High Commission and works with its programme Invest Salone to boost investment. ARIA has developed a pool of investment opportunities with a number being in the pipeline of development finance institutions.
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