Africa Local Currency Bond Fund (ALCBF)
January 2017 - July 2021
FSD Africa Investments has invested debt and equity in the Africa Local Currency Bond facility that will support the development of African capital markets, specifically primary local currency corporate bond issues, and in particular in fragile and conflict affected states.
The Fund creates opportunities for local African issuers, investors and intermediaries by providing technical assistance and anchor investment in companies whose ultimate beneficiaries are low-income households and MSMEs. With FSDAI, the ALCBF fund has closed at USD 177 million.
As at 30 June 2019, the fund has support 53 local currency bond issues by 33 private companies and financial institutions operating in agriculture, energy, housing, microfinance, infrastructure and MSME finance, in 17 African countries. Additionally, the fund has crowded in at a multiple in excess of 7 times into the fund close in support of local capital to the real sector. The total outstanding portfolio is US$115.1mn (from US$ 112.65mn in March 2019).
The goal of the Fund’s investment activity is to build local bond markets by mobilising domestic institutional and individual investment to finance companies, particularly in key sectors (financial inclusion, housing, infrastructure, education, agriculture and green energy). This leads to long-term economic benefits – starting with improvements to issuers’ financial and technical capacity, lower borrowing costs, growth of MSMEs, and diversification of savings options for households and institutions.