Â By Omoh Gabriel
IFC, a member of the World Bank Group, and IFC Asset Management Company today announced a series of investments in Ecobank Transnational Incorporated and its group subsidiaries that will help strengthen the financial sector across several African countries and support the regionâ€™s recovery from the impact of the recent turmoil in global financial markets.
Ecobank Transnational Incorporated is a leading Pan-African bank, with subsidiaries in more countries in the region than any other bank. Its subsidiaries are major contributors to economic activity in some of the worldâ€™s poorest countries.
Â By providing capital to a regionally systemic financial institution, the investments will strengthen the banking sector and ease access to credit for underserved segments of the market, such as small and medium enterprises.
The investments totaling $175 million consist of: A $131.4 million investment consisting of a $56.4 million senior convertible loan and a $75 million senior non-convertible loan from IFC Capitalization Fund, funded by IFC and the Japan Bank for International Cooperation and managed by IFC Asset Management Company, in ETI, the banking groupâ€™s Togo-based holding company. An $18.8 million senior convertible loan in ETI by the IFC African, Latin American, and Caribbean Fund, managed by IFC Asset Management Company. A subordinated loan of $12.5 million from IFC to Ecobank Kenya.
A subordinated loan of $3 million from IFC to Ecobank Liberia; Local currency denominated loans to Ecobank subsidiaries in; Cameroon, Central African Republic, and Chad totalling 10 billion CFA ($9.4 million equivalent) using proceeds from the IFC CFA Bond issue in Central Africa.
Arnold Ekpe, CEO of the Ecobank Group, said, â€œThe investments from IFC, IFC Capitalization Fund, and IFC ALAC Fund will strengthen Ecobankâ€™s capital base and enable us to continue to consolidate our expanded operations and translate our new scale and footprint into value for our customers. Ecobank will use the financing to maintain credit provision in Africaâ€™s most challenging economies.â€ Lars Thunell, IFC Executive Vice President and CEO, said, â€œEcobank and IFC share a strong commitment to supporting sustainable economic growth in Africa by building inclusive financial markets. IFC looks forward to strengthening our strategic partnership with Ecobank to bring financial services to people and places that need them the most.â€ Gavin Wilson, CEO of the IFC Asset Management Company, said:
â€œEcobank is achampion of African growth. We are pleased to be investing in the next phase of its success and to be supporting the positive impact it has on the
markets it serves.â€ IFCâ€™s relationship with Ecobank started 17 years ago with an investment in Ecobank Ghana. Since then, IFC has invested in a number of the groupâ€™s subsidiaries, as well as in the groupâ€™s holding company in 1999 and 2008. IFC has also supported improvements in the groupâ€™s governance structure and social and environmental standards. The banking group is one of IFCâ€™s most important clients in Sub-Saharan Africa