Investors support Damana Assurance Company’s efforts to transform East Africa’s financial landscape.
For the second time in a week, investors in UK government-backed green finance solutions have been given another boost to tackle climate change in Kenya.
Monday, September 30, 2024 – Damana Guarantee Company Limited (Damana) reached a major milestone at an event held in Nairobi today.
Investors in the new company put pen to paper at a signing ceremony, allowing the company to begin operations in earnest.
Damana aims to mobilize private sector capital to support sustainable business development. This is achieved by issuing guarantees to commercially viable projects, companies and institutions that tackle the climate crisis and make progress towards the Sustainable Development Goals (SDGs).
The design and establishment of the company was supported by Private Infrastructure Development Group (PIDG) through UK government-backed investor InfraCo Africa. PIDG launched Damana with an anchor investment and attracted further equity investment from the African Development Bank (AfDB) and CPF Group, with support from Cardano Development and FSD Africa.
Dhamana is a new limited liability company based in Kenya with a mandate to serve the East African region including Kenya, Tanzania, Uganda and Rwanda. It will provide credit guarantees for debt capital market products, improve the credit ratings of such products, and focus investments from pension funds, insurance companies and sovereign wealth funds to support sustainable infrastructure and business development in East Africa.
Damana targets businesses that add value to people’s lives and improve the daily lives of Kenyans and people across the region. Increasing affordable financing for Kenyan businesses means less capital is needed to get projects off the ground, turn a profit and generate growth. Damana will also enable investors to diversify their portfolios and act as a catalyst to transform East Africa’s financial landscape.
It is the second time in a week that an investor in climate solutions backed by the UK government has achieved a milestone. Mobilist entered into a partnership with the Nairobi Stock Exchange last week. It aims to facilitate the listing of new investment products on the Kenyan market, increase private sector finance available for development and climate change projects in Kenya, and foster growth.
Christopher Olobo, CEO of Damana, said:
With the support of our investors and supporters, we have worked to develop Damana as a key catalyst for long-term sustainable finance in the region. Damana’s local currency guarantee connects untapped capital pools to East Africa’s real economy, making a tangible difference in people’s lives and providing local investors with the opportunity to invest in Paris-aligned initiatives.
Lee Stubblefield, Deputy High Commissioner and Director of Development at the British High Commissioner in Nairobi, said:
For the second time in a week, I am proud that the UK has supported climate finance solutions in Kenya. This is an example of our country’s long-term commitment to long-term investment and growth. This is a great pan-African partnership that will improve the lives of people in East Africa for the better, and as the saying goes, if we act together, we can go far.
Speaking on behalf of PIDG, InfraCo Africa CEO Gilles Vaes added:
Building on the success of other PIDG-supported credit enhancement schemes in Nigeria and Pakistan, Damana will demonstrate the value of such schemes in the East African market, opening opportunities for investors and customers alike. Importantly, Damana will engage new partners and investors in efforts to urgently address the climate crisis and accelerate the realization of the United Nations Sustainable Development Goals.
The African Development Bank’s equity investment in Damana strengthens the credit enhancement company’s catalytic role and potential in leveraging local currency infrastructure financing opportunities and supporting deepening debt capital markets in regional member countries. Together with partners such as the Private Infrastructure Development Group (PIDG), we intend to replicate this business model in appropriate markets across Africa. The first example of this type of credit enhancement company was the successful Infrastructure Credit in Nigeria and now Damana in East Africa. The investment in Damana is consistent with the Bank’s priority of mobilizing capital through innovative vehicles from African institutional investors, such as pension funds, sovereign wealth funds and insurance companies, for Africa’s infrastructure development.
Dr. Hosea Kiri, CPF Group Managing Director and CEO, OGW said:
We are proud to be part of this transformative initiative through Damana Assurance Company. We believe in the power of innovative financial solutions that drive sustainable growth. By leveraging local currency guarantees, Damana frees up critical capital for critical infrastructure projects and fosters economic development. This partnership aligns with our commitment to invest in initiatives that improve people’s lives and economies, while contributing to a more sustainable future.
Joost Zuidberg, CEO of Cardano Development, concludes:
Damana’s real strength lies in its ability to attract significant investment from East African institutional capital, build a strong foundation for future scale-up according to its potential, and contribute meaningfully to the region’s sustainable economic growth. Part of our core work is developing assurance solutions for emerging and frontier markets, and we are excited to formalize this partnership today to jointly provide Damana with the critical support and funding needed to achieve this important objective.
Note to editor
UK-Kenya strategic partnership
The UK-Kenya Strategic Partnership Joint Statement can be found here.
About Damana
Damana Guarantee Company (Damana): Damana works to promote the development of domestic capital markets in East Africa. This is done by linking important sources of underutilized domestic institutional capital with the real economy, such as new green infrastructure and providers of credit to businesses. This will improve access and affordability of local capital and provide new low-risk opportunities for local investors. Damana also serves to provide portfolios of companies with access to the local currency capital they need to deliver bankable projects, meet high demand for new affordable housing, transportation, water and energy infrastructure, and foster long-term economic development. www.dhamana.com
About PIDG
Private Infrastructure Development Group (PIDG) is a developer and investor of innovative infrastructure projects that mobilizes private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and South and Southeast Asia. PIDG investments foster socio-economic development, fight poverty and contribute to the Sustainable Development Goals (SDGs) in a just transition to net-zero emissions. PIDG realizes its goals in line with its values of pioneering, partnership, safety, inclusivity and urgency. PIDG provides technical assistance for upstream early stage activities and concessional capital. Its project development arm, which includes InfraCo Africa and InfraCo Asia, invests in early stage project development, projects and corporate capital. PIDG’s credit solutions include EAIF (Emerging Africa Infrastructure Fund), one of the first successful mixed debt funds in low-income markets. GuarantCo is a guarantee arm that provides credit enhancement and local currency solutions to reduce project risk. And there is a growing portfolio of local credit enhancement schemes that can leverage domestic institutional capital for infrastructure financing. Since 2002, PIDG has supported 233 infrastructure projects to financial close, providing an estimated 228 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Global Affairs Canada, Germany, and IFC. www.pidg.org
About African Development Bank (AfDB)
The African Development Bank (AfDB) is Africa’s leading development finance institution. The organization is made up of three different entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigerian Trust Fund (NTF). With a presence in 34 African countries and an office in Japan, AfDB contributes to the economic development and social progress of its 54 regional member countries. www.afdb.org
About CPF Group
CPF Group offers a comprehensive range of services through its various subsidiaries, including CPF Financial Services, which manages both private and public pension funds. In particular – the Public Service Superannuation Scheme (PSSS). Local Authority Pension Trust (LAPTRUST). Taifa Pension Fund. County Pension Fund and CPF Individual Pension Plan. The foundations under our control have a total membership of just over 500,000.
Other subsidiaries include Laser Infrastructure & Technology Solutions (LITES). Laser real estate services; Rukisha Advance payment platform. CPF Asset Management Company; CPF Capital & Advisory; Laser Insurance Brokers (LIB). The Group offers a wide range of services including ICT and renewable energy solutions, real estate services, insurance intermediation, smart money platforms, fund management, transaction advisory, trust fund services, training and consulting, and corporate fiduciary services. Born from an uncompromising commitment to living well, CPF Group prioritizes new models and approaches when engineering turnkey solutions for customers across the region. www.cpfgroup.or.ke
About Cardano development
Founded in 2007, Cardano Development (CD) incubates new companies and creates and manages fund managers. Through careful risk management analysis in data-poor environments, CD identifies scalable solutions that help make frontier financial markets more inclusive, investable, and sustainable, and unlock lasting economic value. CDs create a scalable solution to currency, credit, and liquidity risks in these markets. With over USD 6 billion in assets and over USD 3.1 billion in capital under management, CD supports scale-up ventures (TCX, GuarantCo, Frontclear, BIX Capital, ILX Fund, AGRI3 Fund) and numerous new startups through ongoing management support services and corporate governance oversight. www.cardanodevelopment.com.
