Standard Bank is a leader in forex trading across Africa, making it the go-to choice for investors seeking local currency exposure in emerging markets. Picture: Armand Hough / Independent Newspapers
The Standard Bank Group yesterday said it has signed an agreement with the International Finance Corporation (IFC) to expand local currency lending and accelerate development projects across Africa.
This collaboration aims to expand local currency lending and accelerate essential development projects across the continent, a crucial step for countries struggling with currency liquidity.
This partnership will see Standard Bank and IFC work together on cross-currency swaps and derivatives, enhancing the market expertise that both institutions bring to the table. The primary goal is to improve access to local currency financing for businesses, especially in regions where such financing is often challenged.
The bank said its ongoing partnership with IFC contributes to sustainable development across Africa, supporting its sustainability and development goals, the United Nations Sustainable Development Goals (SDGs), the Paris Agreement, and the African Union’s Agenda 2063.
Kayode Solola, head of global markets for Africa regions at Standard Bank Group said global investors have shifted their gaze to Africa, driven by positive market reforms and attractive returns.
“There is also growing interest in sub-Saharan countries with investors recognising the continents potential,” Solola said.
“The agreement with IFC further entrenches Standard Bank’s ability to make a real difference in the countries in which we operate, allowing deeper participation of local stakeholders in their own economy.”
Standard Bank was selected as the partner for this initiative due to its long-standing relationship with IFC and a strong track record on both local and foreign currency financing solutions. As the largest bank in Africa, with a presence in over 20 countries, Standard Bank is uniquely positioned to access local currency markets.
Standard Bank is a leader in forex trading across Africa, making it the go-to choice for investors seeking local currency exposure in emerging markets. Its large footprint enables the bank to effectively mitigate currency risks throughout the continent.
IFC has long been a pioneer in local currency financing, providing a variety of products to address currency mismatch risks, including loans and bonds, structured products, and risk-management solutions.
In fiscal year 2024, IFC achieved a record $5.8 billion in local currency financing through 118 commitments in 34 currencies.
This agreement builds on the long-standing partnership between Standard Bank and IFC, which includes notable collaborations such as anchoring Standard Bank’s first green bond in 2020; a partnership to increase climate and affordable housing finance in South Africa through multiple strategic transactions, including a $250 million sustainable term loan to entrench Standard Bank’s sustainability commitments; and a $300m sustainable Tier 2 capital loan.
Martin Habel, head of treasury client solutions for Europe, the Middle East and Africa at IFC said they were looking forward to strengthening their relationship further with the bank.
“Enhancing access to local currency financing in Africa is essential for business growth, job creation and the development of local capital markets,” Habel said.
“This agreement supports IFC’s strategy to expand funding and hedging solutions, facilitating access to local currency financing and reducing reliance on foreign currency-denominated debt in African countries.”
Meanwhile, the IFC last week was signed on as lead arranger for the Kalumbila-Kolwezi 700MW interconnector being developed by Enterprise Power DRC (Enpower) and powering the Democratic Republic of Congo from the Southern African Power Pool via Zambia.
Enpower and the IFC signed a collaboration agreement in June 2022 to assess the bankability of the interconnector project. After being signed on as lead arranger, the IFC will now coordinate debt syndication, conduct lender due diligence.
BUSINESS REPORT