ImpactReport

Annual Impact Report 2023 1

 Table of Contents

A word from our CEO  3

1. Introduction  4

2. Headline impact numbers  5

Results against our five-year strategy  5

3. Our impact  6

Theme 1: Promoting innovative climate finance  6

Supporting venture building with Persistent Energy  8
Scaling up off-grid energy financing with Nithio FI  9
Catalysing climate resilience with BFA Global  10
Improving institutional capacity through Climate Finance Training  11

Theme 2: Developing carbon markets in Africa  12

Linking smallholder farmers to global carbon markets  14

Theme 3: Harnessing Africa’s natural capital for sustainable development  15

Amplifying Africa’s voice in the global discourse on natural capital  16

4. Integrating gender in our work  17

Women as leaders  18
Women in business  18
Women as beneficiaries  19
Gender policy and research  19

5. Advocacy and stakeholder engagement  20

Nairobi Declaration on Sustainable Insurance (NDSI)  21
CPI report: the Landscape of Climate Finance in Africa  22

6. Learning and adapting  23

7. The year(s) ahead…  25

A word from our Board Chair  26

A word from our principle funder  27

2 Annual Impact Report 2023

A word from our CEO
Mark Napier, CEO, FSD Africa

2023 has been an important year on many fronts. For

FSD Africa, it is the year we celebrated ten years of our
existence, a milestone that our staff, our Board, and
FCDO, our principal funder, are extremely proud. During
this period, we evolved as an organisation to respond An important message from the Africa Climate Summit,
effectively to Africa’s development financing needs, where the continent’s role as part of the solution in the
working particularly with financial intermediaries, policy world’s fight against climate change was acknowledged,
makers and regulators, investors and others, to make was that mobilising domestic private capital must be a
Africa’s financial markets fit-for-purpose. We ended our key focus – putting Africa’s capital to work in its own
first decade of existence having created value for at least backyard by building the instruments and infrastructure
12 million individuals and 3.2 million businesses. to allow that capital to flow towards climate action and
other projects. The African Leaders Nairobi Declaration
In 2023, we also celebrated the growing maturity of FSD on Climate Change and Call to Action provides a
Africa Investments, which is marking six years since it blueprint for future action on renewable energy, green
started and has notched up some impressive, ground- industrialisation and other issues, all of which will require
breaking achievements. More on what FSD Africa more innovation all the way up and down the financing
Investments has delivered during this period can be value chain.
found here.
Africa’s climate ambition, as stated in its Nationally
More worryingly, 2023 is also the year that we have all Determined Contributions, the Nairobi Declaration
had to recognise that the global community is struggling and other documents, is by and large already set. The
to achieve its climate and social development goals. financing needed to achieve it will not be delivered at
The latest Global Stock Take Report on progress against scale using the same approaches that have been used to
the 2015 Paris Climate Agreement indicates that “global date. That is why FSD Africa, with its focus on innovative
emissions are not in line with modelled global mitigation financing and financing innovators, will be investing
pathways, and there is a rapidly narrowing window to more resources to support financial intermediaries and
raise ambition and implement existing commitments to bring new financing instruments and mechanisms
in order to limit warming to 1.5 °C above pre-industrial to the market. We are also excited by the potential
levels”. On the social development side, the UN reports for carbon markets to spur innovation in financing
that all of the SDGs are seriously off track, with progress marginalised communities.
on 11 out of the 17 SDGs having stagnated. This is
especially true in Sub-Saharan Africa where more than And we are already actively exploring structures that will
three-quarters of the countries have a score of less than get more finance flowing into nature and biodiversity:
60 percent, meaning that most countries in the region we have been encouraged by our work to date on the
have fallen behind on at least seven SDGs. Taskforce on Nature Based Financial Disclosures and by
the commitments by the financial institutions who are
Addressing these challenges will require not just a lot members of the African Natural Capital Alliance.
more money but that money is better targeted and better
structured. We support the push for a change in the This year’s impact report highlights the emerging
global financial architecture to make it more responsive outcomes of our work on innovative climate finance,
to today’s development context. We also recognise growing Africa’s carbon markets, and financing for nature
that a lot of work needs to be done at the receiving end, and biodiversity. These three areas will remain a key
including in Africa, to ensure that when more capital starts focus for us for the foreseeable future. We welcome your
to flow as a result of global reforms, developing countries thoughts on how to enhance the impact of our work in
are able to absorb it. these areas - to make finance work for Africa’s future.

Annual Impact Report 2023 3

 Introduction
FSD Africa is a specialist development agency committed to making finance work for Africa’s future. Set
up in 2012, our mission is to address systemic challenges in Africa’s financial markets in order to spark
large-scale and long-term change for Africa’s people and for the planet.

We improve policymakers’ and regulators’ institutional

capacity and support the development of guidelines,
regulations, and frameworks to promote financial
sector innovation. FSD Africa also supports early-stage
60%
transactions through the deployment of catalytic capital
alongside other tools1. The development of appropriate Green Portfolio
financial products and market infrastructure, based
on data and insights gleaned from research and our Since 2017, our investments in green
interactions with various market participants, is central
initiatives have grown considerably: as of
to our work. We believe this mix of instruments has the
power to de-risk investments and create new investment March 2023, we had invested approximately
vehicles, to allow capital to flow to under-invested parts $90.9 million (£76.3 million). We intend to
of the economy. double this figure by 2025, making green,
sustainable initiatives 70% of our total
In March 2023, we celebrated a decade of working to
portfolio (up from the 60% that it is today).
make financial markets in Africa stronger and greener.
Our April 2021 to March 2026 strategy (‘Finance for a
Sustainable Future’) has been evolving to make sure
we address Africa’s expanding financial sector needs. FSD Africa has supported 12 transactions between
We are now placing a greater emphasis on new ways April 2021 and March 2023, 58% of which were
of mobilising resources for sustainable economic financed in local currency. During the same period
development – through innovative climate finance our interventions mobilised and catalysed2 $1billion
solutions, leveraging Africa’s natural capital and (£820million) to advance Africa’s green growth and social
developing carbon markets. development agenda.

FSD Africa’s progress in driving sustainable finance

90 35
Amount committed to green

80 30
No. of green interventions

70
25
60
(£ million)

50 20
40 15
30
10
20
10 5

0 0
31 March 31 March 31 March 31 March 31 March 31 March 31 March
2017 2018 2019 2020 2021 2022 2023

1
https://fsdafrica.org/our-work/fsdai/tools/
2
Capital mobilisation-refers to the leveraging of (public) and private sector investment through direct investment,
syndicated loans, guarantees, lines of credit and investment in a fund. Preference is to crowd in more private capital.
Capital catalysation-is used for a more systemic set of activities that enable or encourage private sector investment
through activities such as support for policy reform, capacity-building and other activities that trigger a response from
private investors or open up new opportunities for private investment.

4 Annual Impact Report 2023

Headline Impact Numbers
Our Theory of Change outlines our goals for the African continent: reducing or avoiding greenhouse gas
emissions; improving access to jobs and income for African people, including women and young people; and
reducing vulnerability to economic and climatic shocks.

This part of the report highlights how far we’ve come and what we’ve accomplished since April 2021, when
we started implementing the sustainable finance strategy. During the two year’s we have also learnt lessons on
what delivering ambitious green targets entails. We reflect of these lessons later in the report.

CLICK HERE TO VIEW OUR THEORY OF CHANGE

Results against our five-year strategy

Net change in greenhouse gas emissions– tonnes of 4% 7.36 tCO2e

emissions reduced or avoided as a result of
FSD Africa initiatives (million metric tCO2e) 0.311 tCO2e

90,000 W 41%
Number of jobs created and/or protected/supported 31,500
37,000

3% 5,610,00
Number of people with improved access to
basic services
142,000

£ 1.7 billion 48%

Amount of finance mobilised/catalysed for green
£370 million
projects and targeting needs of low-income groups
£820 million

41 29%
Number of FSD Africa-supported transaction that
7
have been closed
12

Number of regulations, policies, investment 45 67%

guidelines and master plans developed/refined for 18
financial markets 30

36 14%
Number of market infrastructures designed/ 2
improved/adapted 5

32 38%
Number of financial intermediaries supported 4
12

Number of institutions reached by FSD 132 236%

Africa-sponsored capacity- building and technical 79
assistance initiatives. 293

Targets (April 21 – March 2026) Results achieved (as of June 2022) Results achieved (as of March 2023)
% achieved (as of March 2023)

Annual Impact Report 2023 5

 Our Impact
Theme 1: Promoting innovative
climate finance

A worker at Darway Coast, a beneficiary of FSD Africa and InfraCredit’s Green Financing Facility.

6 Annual Impact Report 2023

 Africa will need $2.8 trillion (£2.3 trillion) between 2020
and 2030 to reach its net zero goals, as defined in the
Nationally Determined Contribution (NDC) plans under the
Paris Agreement.

That’s an average of $277 billion (£227 billion) a year.3

Current climate finance flows are falling far short of this There is growing recognition too that the existing global
– only $30 billion (£25 billion) is available annually from architecture has been unable to support the mobilisation
domestic and international sources, representing only of stable and long-term financing to combat the climate
12% of what is needed. The private sector’s4 contribution crisis.5 Without fixing these intractable issues, mobilising
of $4 billion (£3.3 billion) per year makes up only 14% of the required finance for climate and development
current annual flows. priorities will remain challenging for Africa.

Since 2017, FSD Africa has helped to mobilise green

The climate financing gap finance by supporting the first green bond issuances in
Kenya and Nigeria. We have since used this experience to
exists because of a variety of build a diversified portfolio of other projects in innovative
factors. These include: climate finance. Through this support, we’ve played a
crucial role in 12 local currency green bond issuances in
Kenya, Nigeria, Rwanda and Morocco, which together
The high cost of capital have catalysed around $347 million (£272 million) for
green projects – of which 30% was crowded in during the
Poor quality information period covered by this report (April 2022 to March 2023).

On the following pages we describe in more detail some

Capacity gaps
of the interventions FSD Africa has invested in to promote
innovative climate finance.
Negative perceptions of ‘Africa risk’

Weak (or absent) policies and

regulations

Lack of bankable projects

Limited investment instruments

3
Climate Policy Initiative, Landscape of Climate Finance in Africa.
4
Largely corporates and commercial financial institutions.
5
UN, Reforms to the International Financial Architecture.

Annual Impact Report 2023 7

 Supporting venture building with Persistent Energy

FSD Africa Investments (FSDAi) has invested in Persistent Our investment in Persistent has yielded significant
Energy to help establish a funding vehicle of over $100 benefits for the company’s investee ventures. For
million (£82 million). Operating as a venture builder, instance, Persistent’s investment in SolarTaxi, an innovative
Persistent directs human and financial resources into and fast-growing electric vehicle assembling business in
pioneering early-stage enterprises that drive climate Ghana, is helping to scale their solutions and revolutionise
change mitigation and adaptation. the transportation sector in the country. SolarTaxi’s
products are assembled by local engineers using a
combination of imported and locally sourced materials,
To support Persistent’s mission, FSDAi provided meaning their costs are around 40% cheaper than those
equity capital, fostering a catalytic partnership. of firms importing already assembled electric vehicles.

While most investors avoid early-stage ventures,

Persistent defies the norm by championing risk-taking
and democratising capital access for green ventures. It
identifies founders of small companies with promising
ideas who lack financial backing.

“At least 40% of start-ups fail,

while a significant number of
the rest struggle to survive.
Access to financing is a key
challenge in the early stages
of a business’s growth.”

Toukam Ngoufanke,
Principal & Venture Builder at
Persistent Energy

By granting start-ups access to amounts of capital as low The company has also generated over 100
as $50,000 (£41,000), coupled with technological and full time jobs and is helping to promote
strategic guidance, Persistent nurtures the growth of small social justice and gender equality: 90% of
companies and facilitates subsequent funding rounds. its engineers are women.
The company’s investment strategy has grown from
focusing solely on renewable energy to covering a
wider range of climate solutions to drive carbon-neutral
economic development in underserved markets. FSDAi’s
investment has allowed Persistent to invest in e-mobility,
off-grid solar, climate technology and energy efficiency. 100 90%
This has contributed to the creation of over 7,000 full
time jobs,6 while helping avoid emissions of 1.7 million
tCO2e from the atmosphere.

6
Based on FSD Africa’s jobs measurement framework.

8 Annual Impact Report 2023

 Scaling up off-grid energy financing with Nithio FI

To help scale up off-grid energy financing in Kenya, improved access to clean energy. It now supports over
Nigeria and Uganda, FSDAi has invested in Nithio FI, 700 full time equivalent green jobs, and has avoided
a business that helps unlock capital to build climate emissions of 70,500 tCO2e. To scale up its activities, in
resilience and energy access across Africa. addition to providing finance to bigger well-established
companies, Nithio has to focus on the opportunity to
Nithio’s unique selling point is its AI and data-driven finance smaller companies to help them grow, hence
capabilities. These enable it to standardise credit risk driving wider access to affordable clean energy.
assessments to inform lending and create a more
sustainable way to drive capital towards climate “Nithio recognizes the outsized impact energy access
financing. This includes lending to off-grid solar can have on women and seeks to scale access equitably,”
companies. Nithio currently provides financing to pay- says Benita Murray Bruce - Nithio’s Senior Legal Counsel.
as-you-go solar home system companies, productive
use appliance companies and microfinance institutions.
This helps those companies provide renewable energy
solutions for households and small businesses.

FSDAi’s investment helped Nithio raise $23 million

FSDAi is a well-known player
(£19 million) from other private investors and
in innovative early-stage
development finance institutions in its first capital vehicles, they were one of
raise. This has enabled the company to lower the cost the earliest investors into our
of capital to its clients. As of June 2023, Nithio’s loan open-ended vehicle, and they
continue to inspire confidence
commitments stood at $19.8 million (£16.2 million) on
in other investors. That’s
ten investments, with total committed capital at $26.5 helped us build
million (£21.7 million). a reliable track record.

Grace Fenton,
Since FSDAi’s investment, Nithio has scaled up Nithio’s Chief of Staff
its operations to reach nearly 19,000 people with

In a male-dominated industry, Nithio is also working hard

to enable gender inclusivity. Three of its four founders
are women, and women make up 40% of management.

The company continues to seek investment opportunities 40%

with women-led companies, and its impact metrics have
integrated a gender lens too.

“A value of our data-driven platform is the ability to see gender-disaggregated impacts. That has been helpful,”
explains Grace Fenton. Nithio recognises that its impact can benefit women through increased financial inclusion,
improved quality of life, and better access to services and information.

Annual Impact Report 2023 9

 Catalysing climate resilience with BFA Global

To crowd in capital from other investors and build a The programme is focused on seeding and accelerating
stronger innovation ecosystem for climate resilience in climate resilience solutions, and nurturing the growth of
Africa, FSD Africa is implementing an ambitious Catalysing an emerging and important sector in Africa.
Climate Resilience (CCR) programme with BFA Global.

The Catalysing Climate Resilience (CCR) programme has three components:

TECA (Triggering Exponential Climate Action)

A new venture launcher, seeding and incubating climate resilience solutions by working with
pre-selected entrepreneurs to develop ideas into viable businesses.

Catalyst Fund
An investment fund accelerating the growth of climate resilience solutions through its $30
million (£25 million) Africa Fund.

Ecosystem support
This contributes to the growth of the climate resilience sector through stakeholder convening,
knowledge-building activities and the leveraging of learnings and investment opportunities from
TECA and Catalyst Fund.

Through our support, the CCR programme has made Through its involvement in the CCR programme, Sand
significant progress. A total of $1.4 million (£1.1 million) to Green received financial management, technological
has been mobilised to support climate resilience development and marketing support. This resulted in
business models. optimised operations, access to a network of investors in
Africa, initial ideas for monetising its website, an improved
design for its agroforestry software, and a clearer
With this capital, more than 50 entrepreneurs understanding of how to engage with its upstream and
(32% being female) have received support and downstream customers.
follow-on investments.

Thanks to this support, Sand to

Green has raised over $1 million
(£819,000) in seed funding, and
the company has acknowledged the
role the CCR programme has played.

32%
We would have taken much
longer to make the strides we’ve
made if the support was not
customised to our vision. We
Sand to Green is one of the Africa-based start-ups that would have postponed certain
things perhaps. The knowledge
the CCR’s Catalyst Fund has invested in. The company’s and experience of the consultants
goal is to reverse the effects of desertification. It promotes was just right for us, and we
sustainable food production through agroforestry, appreciate that we can still access
solar-powered desalination of brackish water, and other their advice.

climate-smart farming practices. Gautier de Carcouet,

co-founder of Sand to Green.

10 Annual Impact Report 2023

 Improving institutional capacity through Climate Finance Training

To create a regional centre of excellence for climate Through the training, policymakers, regulators and
finance, bridge the gap in capacity, and improve the financial sector professionals have been given a greater
quality of information on climate finance, FSD Africa has voice with which to raise awareness of climate financing.
partnered with the Cambridge Institute for Sustainability
Leadership (CISL), the International Institute for In Ethiopia, for instance, the training targeted several
Environment and Development (IIED) and the Eastern key technical staff in the government, from the Ministry
and Southern African Management Institute (ESAMI) to of Finance, the National Bank of Ethiopia (NBE) and the
develop the Climate Finance Training programme. Ethiopia Roads Authority. Those who took part have
highlighted how crucial the programme was in improving
their capacity to promote sustainable development. It has
exposed them to innovative financing instruments, like
The programme aims to accelerate access green bonds and carbon markets, and technologies that
to climate finance in drive sustainable growth.
sub-Saharan Africa (SSA) by developing
the in-country capacity of policymakers,
regulators, academic institutions and
financial market participants.
As a ministry we are now
equipped with the right
information about climate
To do this, it provides the necessary information and impact, the responsibilities of
expertise to access funds like the Green Climate Fund public sectors like ministries and
other stakeholders, and what
(GCF) and other climate-related funds. It also focuses
they have to do to minimise
on accrediting direct access entities (DAEs), training or mitigate climate problems
government officials and supporting non-state actors in and sustain economic growth.
project preparation. We are now more aware of
responsibilities and duties with
regards to policies and incentives
The training empowers participants to create new climate for mobilising green finance in
finance networks and strengthen existing ones. It also Ethiopia, and Africa at large.
inspires investor confidence in climate-smart projects by Samuel Wolde, a Senior Data
ensuring the availability of locally trained professionals to Analyst at Ethiopia’s Ministry of
Finance
champion the delivery of climate finance products.

To date, the training

has benefited over
70 officials in
13 institutions from
11 countries in SSA

Annual Impact Report 2023 11

 Theme 2: Developing
carbon markets in Africa

A lady operating a mobile in Limuru tea farms.

12 Annual Impact Report 2023

Carbon markets offer African nations a unique opportunity systems. The absence of clear guidelines and monitoring
to access diverse capital. This mobilised capital could mechanisms further complicates their implementation.
drive climate projects, foster sustainable development and Furthermore, establishing and operationalising carbon
expedite the transition to a low-carbon, climate-resilient markets requires expertise in emissions accounting,
future. By participating in carbon markets, African nations market design, verification and compliance, which is
can align with global efforts to mitigate climate change lacking in many African countries.
and fulfil their Nationally Determined Contributions (NDCs)
under the Paris Agreement. However, there are several But these are challenges we believe we can overcome.
challenges to overcome. FSD Africa is working to develop carbon markets in
Africa, focusing on innovation, scaling up use cases and
Insufficient awareness and knowledge of carbon markets establishing market infrastructure. We believe that carbon
deters their development in Africa. Many African countries markets have the potential to yield substantial benefits
lack the policies, regulatory structures and emission for Africa’s climate resilience efforts, as highlighted by the
reduction targets necessary for effective carbon trading two programmes below.

Investing in a digital carbon marketplace with 4R Digital

FSD Africa is supporting 4R Digital in developing Cavex, a digital platform that enables
smaller-scale projects and low-income households to participate in carbon markets.

We’ve provided assistance in the concept development process, a crucial step towards the platform’s full commercial
operation, which is expected to attract additional investors. The project is now at minimum viable product stage,
with active use cases tested on the platform. The next stage of commercialisation will be supported by an advanced
subscription round, led by E3 Capital and FSD Africa Investments.

The Cavex platform holds potential for scalability across geographies, participants and carbon savings schemes. This
innovative technology, which leverages the widespread accessibility of smartphones coupled with satellite data and
cutting-edge field technologies, opens the door for low-income households to take part in carbon credit markets.
The platform is aiming to eventually host over 2.1 million small-scale users, with the potential to sequester over 27
million tCO2e.

Annual Impact Report 2023 13

 Linking smallholder farmers to global carbon markets

In collaboration with Rabo Foundation,7

FSD Africa has provided financial support
to small-scale farmers in Kenya, Nigeria
and Zambia, aiding their transition to
sustainable agroforestry practices through
the Acorn project.

Acorn, which stands for ‘Agroforestry Carbon Removal Units

for the Organic Restoration of Nature’, is a Rabobank initiative
designed to open up global carbon markets to smallholder
farmers in developing nations. The project aims to facilitate With 182,000 farmers
large-scale adoption of agroforestry among farmers and already onboarded,
enable them to monetise the carbon stored in the trees
they plant. This is achieved through Acorn’s technologically
Acorn provides FSD Africa
advanced and transparent global marketplace. with a chance to assume
a pivotal role in guiding
Local implementation partners have helped to gather
data from farmers and facilitate their onboarding onto the smallholder farmers across
Acorn platform. This onboarding empowers farmers to Africa towards sustainable
sell carbon removal units (CRUs) to corporate buyers. The
agricultural practices.
introduction of supplementary income through carbon
credits will enhance the financial viability of the transition
to agroforestry for these farmers.

A tea farmer in Limuru, Kenya tea farms.

7
Rabobank Foundation is a public benefit organisation and the cooperative foundation of the Rabobank Group.

14 Annual Impact Report 2023

Theme 3: Harnessing Africa’s
natural capital for sustainable
development

Annual Impact Report 2023 15

 Africa possesses abundant natural resources and is One challenge is the lack of awareness and data. Many
renowned for its diverse ecosystems, which provide a people and organisations do not fully understand the
home for around a quarter of global biodiversity. The extent and urgency of the nature loss crisis, or the
natural capital found in Africa plays a pivotal role in potential risks and benefits of nature-positive initiatives.
the economic prosperity of its people too: 23% of the Another challenge is the focus on short-term profits,
continent’s GDP relies on natural capital.8 The future of especially in the private sector and financial markets,
Africa therefore hinges upon the responsible management which often prioritise quick financial gains over long-term
of these natural resources, which face unprecedented sustainability.
threats from expanding populations, over-exploitation,
and habitat destruction. There is also a lack of financial incentive to support
nature-positive projects. The prevailing financial systems
Africa has faced a range of challenges that and regulatory frameworks often fail to consider the true
value of natural resources and ecosystem services, which
have led to nature being undervalued or makes it difficult to attract capital.
ignored. This has led to a lack of action
from many stakeholders when it comes to FSD Africa believes that the financial sector should play
a key role in mobilising capital to protect and restore
protecting nature and supporting nature-
nature. That’s why we’ve invested in projects like those
positive projects. detailed below.

Amplifying Africa’s voice in the global discourse on natural capital

FSD Africa is implementing a project to promote an are integrated into the operations and business activities
African voice for the Taskforce on Nature Related of financial institutions across the continent.
Disclosures (TNFD) and nature-related financial risk
management. We’re doing this in partnership with Vivid Through our advocacy campaigns and media roadshows,
Economics, McKinsey & Company, Oliver Wyman, TNFD FSD Africa has encouraged leading African financial players
and the United Nations Economic Commission for Africa to sign up to ANCA’s objectives. The alliance currently
(UNECA). Through this project, we’ll build institutional has over 30 signatories with combined assets under
capacity for nature-related financial risk management in management of more than $390 billion (£321 billion).10 We
Africa. During the previous reporting period, we focused hope to eventually grow membership to 95 signatories.
on convening stakeholders and raising awareness of
nature-related issues. ANCA is also helping to establish coordination among
financial institutions to obtain accurate data that will
In June 2022, we launched the initial academic unlock investment opportunities and make sure Africa’s
justification9 for the TNFD, collaborating with a team voice on the global nature agenda is heard. This is a
of economists and consultants to quantify the impact prerequisite for the establishment of national nature
of nature on an underlying loan book value. We’ve strategies – a step which has been encouraged by the
tested these results with industry partners, piloting the Global Biodiversity Framework, adopted by more than
model across asset classes, sectors and geographies. 180 countries at the Biodiversity COP15.
By providing consistent and comparable data on
nature-related risks and opportunities, we’re enhancing
transparency and enabling better-informed investment
decisions that support biodiversity conservation and
sustainable practices. This is leading to a deeper
understanding of how different physical and transition
risks may impact aggregate profits.

One of the greatest successes of this project has been the

launch of the African Natural Capital Alliance (ANCA), a
forum for mobilising the financial community’s response
to nature loss. The aim of this initiative is to ensure that
nature-related strategy, governance and risk capabilities

8
World Economic Forum, New Nature Economy Report 2020.
9
Vivid Economics and FSD Africa, Nature and financial institutions in Africa: A first assessment of opportunities and risks, 2022.
10
This is a conservative figure, which excludes one large financial institution that does not disclose its Africa figures separately.

16 Annual Impact Report 2023

4: Integrating gender in our work

Annual Impact Report 2023 17

 FSD Africa’s work in financial markets continues to emphasise the need to be
gender intentional when addressing the climate challenge on the continent.

We are particularly keen on giving women agency in businesses, supporting businesses that serve women in
climate action, and ensuring they are not left behind by innovative ways, learning about the impact of gender
the positive benefits that accrue from such action. In bond demonstration transactions, and researching
2023, we’ve focused on advancing women’s leadership gender and climate financing policies.
in the financial sector, channelling capital to women-run

Women as leaders
To strengthen the position of women as leaders and “By implementing the Nyala Facility backing women
decision makers in green finance, we’ve leveraged our executives at the core of key decision-making processes,
gender-lens investing framework and best practices, FSD Africa Investments intentionally responds to the
necessity of empowering women as capital allocators. This
such as the 2X Challenge Collaborative, to influence initiative makes an important contribution to the multi-
more gender-diverse boards and management teams in billion-dollar funding gap faced by women owned SGBs
our investee companies. in Sub-Saharan Africa. CFF delivers much needed capacity
strengthening to the emerging markets and amplifies the
innovations happening within this asset class."
FSDAi has highlighted women in leadership positions in
companies such as Nyala Facility, Catalyst Fund, Blue Zee de Gersigny, Director, Collaborative for Frontier
Orchard, Persistent, Nithio FI and Transform Health. Finance (CFF)

Women in business

FSD Africa has invested in innovative financing products supported.11 The programme is also working to be more
designed with a gender lens to drive more capital gender intentional by commissioning a gender-focused
to women-owned businesses and support women study on ‘Nurturing Women’s Success in the Tech
entrepreneurs. In our TECA programme, women Startup Ecosystem’ to inform investment decisions and
entrepreneurs represent 50% of all entrepreneurs programme activities in subsequent cohorts.

Box: Nurturing Women’s Success in the Tech Ecosystem

This study aimed at understanding the challenges women boxes ticked. They find reasons to disqualify women and not
entrepreneurs face, how to maintain gender balance, and [fund them]. I have seen the power imbalance more when
how TECA can support women in their programs to achieve I am pitching alone rather than when my cofounder who
sustained success. The findings underpin the importance is a male co-founder [is pitching].” Catalyst Fund, Female
of gender intentional outreach strategies, the need for Founder, 4-year-old startup
empowering connections, and the social norms and barriers
facing women-entrepreneurs. The research concludes with TECA’s commitment to:

“Our networks are weak, and info is not flowing from women Expand recruitment networks and remove
to women or anyone to women.” Catalyst Fund Female application friction;
Founder, 5-year-old startup
Strengthen fellows’ skills to navigate
male-dominated sectors;
The study also expounds on the issue of insufficient funding
flows to women-led ventures, citing reasons such as
investor trends, difference in networks for women and men, Increase access to technical expertise;
insufficient program support, and the biases women face.
Connect fellows to networks and mentors;
“I am starting to see that investors nitpick more with women
rather than men. They think male founders [unlike female
founders] can figure it out even if they do not have all the Play a part in changing the ecosystem.

CLICK HERE TO READ THE FULL REPORT

11
Cohort running from July to September 2022.

18 Annual Impact Report 2023

FSD Africa has also supported NMB Bank in Tanzania s
The bond has served as an example to inform similar
with the public listing of a gender bond, Jasiri bond, in transactions in other markets and has generated valuable
2022. 97% of the number of loans disbursed out of the lessons on reallocation and additionality of benefits for
fund proceeds and 23% of the value of loans disbursed women targeted by such instruments. These lessons will
as a percentage of the bond proceeds were allocated be reflected in our Gender Bonds Toolkit (to be published
to women owned SMEs whereas the rest went to other by mid-2024). The toolkit is designed to be a practical
gender inclusion categories in the bond framework.12 guide for prospective gender bond investors or issuers.

Women as beneficiaries
Through the BimaLab Nigeria Insurtech Accelerator, agency model, in which women represent at least 70% of
FSD Africa has supported interventions that deliver the agents serving over 7,000 women. This intervention
strong gendered downstream impacts for women. In has led to improvements in access to basic services
2022, BimaLab Nigeria supported Soso Care, a low-cost such as health care, while increasing women’s financial
health insurance provider that accepts recyclable waste resilience and delivering environmental benefits.
as payment for insurance cover. Soso Care employs an

Box: Soso Care - advancing the role of women in Nigeria’s economy

Insurance penetration in Africa is historically low. This is due

to the high cost of premiums, low levels of awareness among
customers, and a lack of innovation from insurers. Over 70% Soso
But innovation within the sector is gaining traction, and FSD Care’s 600 agents
Africa is playing a role. are women, and
the business serves 70%
We partnered with Swiss Re Foundation and Nigeria’s over 7,000 women.
National Insurance Commission (NAICOM) to create
BimaLab, an insurtech accelerator that provides start-ups and
innovators in Nigeria with venture-building support, training,
mentorship and coaching.
The agency model enables women to become active
One of the success stories to emerge from BimaLab is Soso participants in the distribution of insurance within their
Care, a leading health micro-insurance start-up operating in communities. This not only creates job opportunities but also
four Nigerian cities. Soso Care offers health micro-insurance, new or additional income streams for women. Insurtechs
as well as payment in cash, in exchange for recyclable waste. such as Soso Care demonstrate the potential of insurance
This allows low-income earners who previously could not innovation to advance women’s economic participation and
afford insurance to access cover. financial resilience.

Gender policies and research

We have been investigating opportunities for

green growth that can deliver economic, social
and environmental benefits for women. As part of
this, we carried out a study on gender inclusion in
African Nationally Determined Contributions (NDCs).
This assessment investigated the extent to which
NDCs consider gender in financial planning for
climate action at national level. Our aim is that the
insights we gain from this research will influence the
mobilisation and allocation of climate financing to
gender-responsive programmes.

CLICK HERE TO READ THE FINAL PAPER

12
NMB Jasiri Gender Bond Impact Report https://fsdafrica.org/wp-content/uploads/2023/07/NMB_Jasiri_Gender_Bond_
Impact_Report_1688831547.pdf

Annual Impact Report 2023 19

 5: Advocacy and stakeholder
engagement

Advocacy and stakeholder engagement play an By engaging with policymakers, regulators

important role in our work. By advocating for and government agencies, we are influencing
positive changes and building collaboration among the design and implementation of policies,
stakeholders this year, we’ve continued to address the regulations, guidelines and frameworks to
challenges that hinder financial sector growth in Africa. promote the mobilisation of green finance and
nature-positive activities, amongst other market
Our advocacy work has also helped shape favourable development outcomes.
conditions that have attracted investments,
encouraged responsible financial practices, and
facilitated the provision of financial services to
underserved populations. Below we outline two
projects in more detail: the Nairobi Declaration on
Sustainable Insurance and the CPI report on the POLICYMAKERS REGULATORS GOVERNMENT
Landscape of Climate Finance in Africa. AGENCIES

20 Annual Impact Report 2023

 Nairobi Declaration on Sustainable Insurance (NDSI)

The NDSI is an African industry-wide Principles for Thanks to campaigns and engagements like these,
Sustainable Insurance (PSI) initiative. Its goal is to harness over 100 insurers, reinsurers and brokers across Africa
the collective financial strength of the African insurance have signed up to the declaration. This has resulted in
sector and direct it towards building a sustainable future. significant milestones, including the establishment of the
It is a declaration of commitment by African insurance Africa Climate Risk Facility (ACRF).
industry leaders to contribute to the realisation of the
United Nations Sustainable Development Goals (SDGs).
The ACRF is a first-of-its-kind financial
commitment by the African insurance
industry to underwrite

$14 billion
(£11.5 billion)

of cover for climate risks by 2030.

Since the NDSI’s launch in 2021, FSD Africa has taken a

lead role in supporting it, through events and thought The aim is to protect over
leadership engagements. These events have brought
together industry leaders13 to accelerate solutions to
sustainability challenges in a post-Covid world, ranging 1.4
B LL ON
from climate change and ecosystem degradation to
poverty and social inequality.

One such event was a session hosted by FSD Africa and

our partners14 at the Marrakesh Partner Action Hub, as
part of COP27. The session highlighted the role of the
African insurance industry in responding to climate
PEOPLE
against floods, droughts and
change and discussed the NDSI and the actions being tropical cyclones.
taken by signatories.

Our goal is to build upon the platform created by the NDSI to bring together different projects15 and
create a well-organised and effective programme. The aim is to drive systemic market change by
embedding ESG principles into African insurance strategy and decision making.

13
CEOs and senior executives from insurers, reinsurers, brokers, insurance associations, regulators and policymakers, as well as
academia and civil society organisations.
14
UN Climate Change High-Level Champions, African Risk Capacity, ICEA LION Group, Namib Re and UNEP PSI.
15
These include the Africa Climate Risk Facility, Geothermal Risk Transfer Energy Exploration, and Flood Resilience Finance in Lagos
State, among others.

Annual Impact Report 2023 21

 CPI report: the Landscape of Climate Finance in Africa

Landscape of Climate Finance in Africa is a pioneering Moreso, this report helped inform the negotiations at
research report to map climate finance flows across several forums, including COP27 and continues to be a
the continent. It was produced through a partnership reference document for climate champions at CoP28,
between FSD Africa, the Climate Policy Initiative (CPI) and by providing credible, independent data that all parties
the Children’s Investment Fund Foundation (CIFF). The could focus on. It also feeds into efforts to measure
study provides a comprehensive analysis of the state of global climate progress by creating a reliable baseline
climate finance by region, sector and source. against which increases in climate finance in Africa
can be measured. For instance, the Global Centre on
The report highlights the funding gap that exists - trillions Adaptation (GCA) has leveraged the data for their flagship
of dollars are needed to fund mitigation and adaptation reports15 and the United Nations Framework Convention
measures. Our work provides suggestions on how sources on Climate Change (UNFCCC) cited the report for their
of private finance could be mobilised to fill this gap. Biennial Assessment of Climate Finance flows 2022.16

This research has been utilised and disseminated at over As an advocacy and influencing tool, the report will
fifteen events with key stakeholders. The dissemination continue to leverage African leaders’ voices to mobilise
events included a presentation to: the UK House of greater international support for increased climate
Commons; Egypt International Cooperation Forum finance flows to the continent. It has also crystalised the
& African Ministers meeting and to Ethiopia country importance of private capital and financing in unlocking
stakeholders from Ministry of Finance and National Bank Africa’s potential for climate-smart, low-carbon growth
of Ethiopia. The report findings were mentioned in over and development.
100 top tier media including the New York times, Reuters,
Financial times, the Guardian, and the Economist.

15
Global Centre on Adaptation. Flagship reports https://gca.org/report-category/flagship-reports/
16
UNFCC (2022). Fifth Biennial Assessment and Overview of Climate Finance Flows Technical Report.

22
22 Annual
Annual Impact
Impact Report
Report 2023
2023
 6: Learning and adapting

Textile factory workers in Ethiopia

Annual Impact Report 2023 23

 Learning and adapting

To deliver impactful and sustainable programmes, it is vital that we learn from our
interventions. To do this, we make use of monitoring data and secondary sources, and
also commission studies to answer learning questions. Our findings help us improve
our work.

These are the main lessons we have documented this year:

Sustainable development requires Climate finance training

patient capital complemented by empowers policymakers
non-financial tools and regulators

Mobilising climate finance requires a long-term vision, Training has helped policymakers and regulators to
innovation and the combination of multiple tools. In the address climate challenges effectively, integrate climate
last couple of years, we’ve observed that to bring ideas to considerations into financial decision making, and drive
scale, it’s necessary to provide technical assistance and the transition to a sustainable and resilient economy. But
institutional capacity building alongside capital. capacity gaps still exist within most national environmental
entities in Africa, so there’s an urgent need to build
The combination of FSD Africa’s knowledge of African institutional capacity and get these bodies accredited for
capital markets, risk, digital innovation, and green finance easy access to climate funds.
with FSDAi’s expertise on investment has been powerful.
Catalyst Fund, for example, received grant funding from This requires the climate change agenda to be
FSD Africa to support the incubation of climate tech start- mainstreamed, to influence policy and change attitudes
ups before moving into FSDAi’s portfolio. And the African toward mitigation, adoption and resilience building.
Natural Capital Alliance, which FSD Africa has helped to
establish, creates a platform for FSDAi to discuss, with
financial institutions, what investments that support natural
capital might look like.

Individual interventions can Advocacy and stakeholder

lead to market development, engagement are key to
not transformation market development

Evidence from our interventions shows that it’s not Transforming Africa’s financial systems requires the
always possible to change the market with a single collaboration of multiple stakeholders, from the public
transaction. This is because replication by other players and private sector. We have seen value from engaging
is influenced by many factors, and some are beyond stakeholders through country round table discussions,
the mandate of one intervention. Changing a market road shows and participation in strategic events to drive
requires a combination of interventions and is sometimes the green agenda.
influenced by external factors beyond our control.
As such, we’re increasing our advocacy, communication
Knowing this, we have introduced an ex-ante assessment and stakeholder engagement efforts, targeting private
that helps to judge the current and potential future state sector players to increase investments in sustainable
of the market, to determine the changes that could be finance solutions.
expected as a result of an intervention.

24
24 Annual
Annual Impact
Impact Report
Report 2023
2023
7: The year(s) ahead…
FSD Africa will continue using a mix of financial
and non-financial tools to innovate climate
Our programming experiences in 2023, solutions, leverage Africa’s enormous natural
and indeed this report, are not just a capital and develop capital markets.
reflection on the past year, but a useful
guide for our future. Some specific intervention areas will include:
accelerating climate resilience solutions and
nurturing the growth of Africa’s climate resilience
We believe Africa is part of the solution to climate ecosystem, enhancing the potential of green
change, not just a victim. The African Leaders bonds to mobilise capital for infrastructure
Nairobi Declaration on Climate Change and Call to deals, and providing local currency solutions for
Action cements the commitments of governments Multilateral Development Banks (MDB) portfolio
to a green growth pathway and will be a risk transfer.
blueprint for FSD Africa’s work. We shall leverage
opportunities that contribute to achieving the
Nairobi Declaration’s ambitions and the Sustainable Our interventions will be made with a
Development Goals (SDGs), for which most African vision of scaling up Africa’s response to
countries are under-performing. climate change, nature and bio-diversity
loss, doing so in an inclusive way, and
We are mindful of the time it takes to transform delivering value to Africa’s people.
financial markets and achieve impact. Putting
together the right building blocks is crucial to the
success of our strategy. Hence the reason for our
continued focus on supporting regulatory changes, Ambitious aspirations underpin our journey, FSD
investing in building the capacity of financial Africa will leverage its decade worth of experience
market actors, and advocating for Africa to adopt to ensure the financial sector is at the forefront of
sustainable finance practices. mobilising private climate finance.

Our target is to contribute to continent-wide growth in private sector

flows to climate finance to at least $100 billion (£81billion) by 2030

Annual Impact Report 2023 25

 A word from our Board Chair
Dr. Frannie Leautier, Chair FSD Africa

As Board Chair, I am delighted to support the publication FSD Africa’s corporate values emphasise its role as a
of FSD Africa’s 2023 Development Impact Report. change agent, its dissatisfaction with the status quo in
African financial markets and its willingness to challenge
The circumstances in which we live and work in Africa conventional ways of doing things so that financial
remain complex and challenging for those involved in markets do a better job for all users. I am constantly
financial markets, whether policymakers, regulators or impressed by the way FSD Africa and its investment
those in the private sector. High levels of public debt arm, FSD Africa Investments, think deeply about how to
continue to limit decision-makers’ room for manoeuvre solve for some of the more intractable issues that hold
while steep falls in the value of many African currencies us back, such as the high cost of capital, and succeed
make it extremely hard for international investors in making transactions happen despite the challenges.
to engage with the investment opportunities that The team is ambitious and determined - they get
undoubtedly exist. things done.

All the more reason therefore that we re-double FSD Africa continues to enjoy robust support from the
our efforts to support financial market innovation UK government, and we were delighted to see that the
to demonstrate that it is possible to transact, and topic of private capital mobilisation has emerged as a
all the more reason that we focus on mobilising priority in a new White Paper on development, recently
domestic private capital, so that the estimated $1.4 launched by Development Minister Andrew Mitchell. We
trillion of institutional capital under management think it is reasonable to assume that our achievements,
in Africa starts to play a more meaningful role in many of which are highlighted in this Impact Report, will
financing Africa’s development - creating economic have played a part in encouraging FCDO to put further
opportunities, reducing vulnerability and delivering backing behind this important agenda. We can be proud
environmental benefits. of that.

An important message from the Africa Climate Summit, In the future, given the scale of the opportunity we see
one of the brighter moments in 2023, was that Africa’s for the work we do, especially in climate finance, we
reliance on international capital creates a dependency would be excited to work with other funders alongside
that the continent doesn’t want and perhaps doesn’t the UK, for whose sustained partnership we are
even need. I am proud that FSD Africa played such a nevertheless immensely grateful.
comprehensive role in making the Summit the great
success that it was, helping focus international attention FSD Africa is in a strong position to continue delivering
on the value of investing to build the continent’s impact and putting more of the building blocks in place
economic resilience, a key objective of FSD Africa’s work for a fit-for-purpose financing ecosystem that serves
for over a decade. Africa’s interests well.

26 Annual Impact Report 2023

A word from our
Principal Funder
Phil Stevens, Director of International Finance, FCDO

It is estimated that the African Continent needs about With its local footprint, networks, and credibility, FSD
$194 billion of additional finance annually to achieve the Africa is also uniquely positioned to amplify Africa’s voice
Sustainable Development Goals by 2030 (OECD 2023). in global forums, including through its involvement on
Public and international finance alone cannot bridge the Taskforce on Nature-related Financial Disclosures
this gap. Private capital, including institutional assets - (TNFD), ensuring that African countries are well
estimated at $1.4 trillion in Africa alone - must also play represented in discussions on reforms that will
their part. affect them.

The recently published International Development White The Foreign Commonwealth and Development Office
Paper sets out the UK Government’s plans to mobilise (FCDO) is immensely proud of its partnership with
more private capital for low- and middle-income FSD Africa. We are its largest funder and will continue
countries to help deliver the SDGs. FSD Africa is one of supporting its efforts to make finance work better for
our leading partners in this area. Since 2012, they have Africa’s future. The needs are significant, but there is
mobilised and catalysed over £2.7bn of capital to date, growing consensus that financing the transition to
improving access to basic services for close to 5 million greener and more inclusive economies represents a
people – including in health, housing, and energy. significant opportunity for Africa. This is why we have
continued to back FSD Africa’s sustainable finance
FSD Africa is leading the way in supporting the strategy - born from a vision that finance can be more
development of innovative solutions. For example, effectively mobilised and allocated for people and
at the inaugural Africa Climate Summit held in Kenya planet. We encourage others to join this pioneering
in September 2023, FSD Africa investments (FSDAi) endeavour.
announced three investments to the tune of $ 19.5
million to support climate adaptation and climate- As you delve into FSD Africa’s 2023 Annual Impact
aligned infrastructure projects in Africa and to promote Report, I encourage you to reflect on the inspiring
the continent’s resilience to climate change. These stories of innovators – supported by FSD Africa - who
investments in Acre Export Finance, Catalyst Fund are making the African continent a cleaner, healthier, and
and Spark Energy demonstrated FSDAi’s commitment more prosperous resilient place.
to partnering with local asset managers and venture
builders to support climate-smart projects that would
otherwise struggle to access the finance they need.

Annual Impact Report 2023 27

 For further information:

Partnership | Progress | Prosperity

FSD Africa, Nairobi, Kenya Foreign, Commonwealth

info@fsdafrica.org & Development Office, London, UK
@FSDAfrica @FCDOGovUK

www.fsdafrica.org www.gov.uk

28 Annual Impact Report 2023