The Germany- Africa Business Forum e.V. (“GABF”), whose goal is to strengthen investment ties between German and Africa, announced it has, in collaboration with private partners from the energy industry, launched a multi-million Euro funding commitment to invest in German energy startups that focus on Africa. The funding commitment, which pledges funds to German startups with exposure to African energy projects, will be the first such intra-regional initiative.

“Our initial goal is to support the investment in German companies and to start with funding allocations by the end of this year”, said Sebastian Wagner, co-founder of the GABF. “Through our partners, we will immediately get involved in investing in solutions-driven German startups with pragmatic business models to solve Africa’s energy challenges through the provision of German technology and innovation,”he added.

“The future of Africa’s energy industry will depend on technology and innovation. When German start-ups and Africans work together, we can build something unique for both our peoples. I applaud the GABF for this well-thought-out initiative. I believe it is in line with the goals of the G20Compact with Africa, driven by Germany,”stated NJ Ayuk, a pan-African energy dealmaker, CEO of Centurion Law Group and Executive Chairman of the African Energy Chamber, a supporter of the initiative.

Anchored in the private sector, the GABF brings together Africa’s foremost executives with German companies, investors and innovators with the aim of driving change. Founded in 2017 as a “private for privates”, the GABF encourages German investors to consider the African continent as a profitable and important investment destination. Through a series of initiatives, the GABF draws together African business and political leaders with Germany’s preeminent innovators to develop fresh investment concepts that shape German and African business ties, as well as economic thought.

The Fitch rating, of the African Development Bank (AfDB), published July 24, in London, is affirmed as AAA, with a stable outlook, on improved assessments, qualifications and estimates. The rating provides a significant boost for the Bank at a time when it is discussing a substantial general capital increase to finance its strategy and activities over the next few years.

Fitch Ratings is one of the leading global providers of credit ratings, commentary and research. The agency upgraded the intrinsic assessment to ‘aa’ from the previous ‘aa’-driven by an improvement in Fitch’s assessment of the Bank’s business environment.

The Bank’s ‘aaa’ support from its shareholders was based on Fitch’s forecasts that the Bank’s net debt will be fully covered by callable capital from ‘AAA’ rated member countries by 2021.

The projection assumes shareholder approval of an increase in subscribed capital from 2020, and lending growth averaging 7 per cent year on year in 2019-2021.

Other key points from the Fitch rating include the following:

The Bank’s solvency assessment of ‘aa’ primarily reflects its ‘strong’ capitalisation.

The equity to asset and guarantees ratio remains within the ‘strong’ range.

Fitch’s usable capital to risk-weighted assets (FRA) ratio, newly introduced, was just below the threshold for an ‘excellent’ assessment (35 per cent) at end-2018 and is likely to be ‘excellent’ in 2019.

Overall risk is rated as ‘low’, with risk management policies seen as conservative and assessed as ‘excellent’.

Concentration risk is considered ‘low’ and has benefited from the Exchange Exposure Agreement with other development finance organisations.

Equity participation is expected to remain below 5 per cent of the banking portfolio by 2021, in line with the internal limit of 15 per cent of risk capital.

FX and interest rate risks are very limited and conservatively managed.

The liquidity assessment is ‘aaa’ and the quality of liquid assets is ‘excellent’.

The Bank’s business environment now translates into no negative adjustment (from a one notch negative adjustment previously) to the improved intrinsic rating, which reflects a stronger assessment of the bank’s strategy to ‘medium’ risk from ‘high’ risk.

The Bank’s outlook is rated as Stable.

As the Fitch rating states, the process for a General Capital Increase (GCI-VII) is expected to be completed by end-2019, including a final agreement on its amount.

The President of the African Development Bank, Akinwumi Adesina welcomed the assessment and said, “I am delighted by the affirmation of the AAA rating as well as the accompanying explanations, which clearly explain the solid and comprehensive reasons for the overall improvements in the intrinsic rating, as well as the ‘extraordinary support’ we receive from our shareholders. It is a massive boost for the Bank to be encouraged so strongly in the year of the General Capital Increase and with so much hard evidence provided.”

He added that “It is also a tribute to all our stakeholders, partners, and those who have been working at and with the Bank during this past year. Fitch’s rating is not just about our credit; it speaks volumes for the Bank’s solid achievements, consistent strategy, development impact, leadership, and overall direction.”