“We’re supporting it because it is so hi-tech that a lot of commercial financial institutions are a little bit uncomfortable. Part of the role IFC plays is to say well we’ve seen this elsewhere in the world, we’ve done it elsewhere in the world, we’d like to do it here,” the IFC Southern Africa division’s senior manager Saleem Karimjee told CNBC Africa.
“I don’t think we will find ourselves in the backbone power infrastructure in South Africa, which is coal-based power, they don’t need IFC, but on this cutting edge stuff they do. It fits very nicely into another strategic area for us, which is climate change.”
The International Finance Corporation (IFC) has carried out advisory services projects worth 65 million dollars and managed 126 projects valued at 217 million dollars.
The financial institution now plans to invest further in Africa and has placed a major focus on solar power projects, particularly in South Africa.
“Two big areas that we’ve been active in in the last fiscal year – renewable energy under the governments RE IPP programme. It was a record year for us in South Africa and a good two thirds of the 400 million that we did was for concentrated solar power projects and wind power projects. The other third a little bit in the financial markets space and a fair bit in the agricultural space,” Karimjee explained.
The Renewable Energy Independent Power Producer (RE IPP) procurement programme has been designed to contribute towards a target of 3,725 megawatts, and towards socio-economic and environmentally sustainable growth.
While the IFC hopes to continue its support of the RE IPP programme in South Africa, it also plans to commit a further 5.3 billion dollars to Africa investments, specifically targeting infrastructure and agricultural sector projects.
“We have a bifurcated approach. Agribusiness is a priority, for our direct business, it’s usually larger scale corporates. We continue to do almost half our business with financial institutions and that is how we try to support smaller businesses, including small agribusiness,” said Karimjee.
He insisted that this endeavour does make good business sense but added that it may be too soon to assess any possible outcomes.
“In a way it’s too early to tell in terms of Africa’s agricultural revolution. We’ve been at it for two years and we’re starting to see good performance. If the rest of our experience is anything to go by in non-agricultural activities, we’re going to have a great ride in agribusiness as well in Africa.”