OPIC, the U.S. Government’s development finance institution is considering a $40 million, 10-year loan to the African Local Currency Bond Fund. The fund, which was established in 2012 by the KfW Development Bank, aims to improve access to capital for the continent’s companies by mobilizing domestic capital to invest in local currency bonds. It also provides local investors such as pension funds and insurance companies with the opportunity to make long-term investments in their own currencies, helping them manage their long-term liabilities better.
The fund, which is managed by Lion’s Head Global Partners, a UK-headquartered investment and advisory firm, invests up to $5 million in any given issuance, targeting non-Sovereign bonds whose proceeds promote financial inclusion, housing finance, renewable energy, agriculture and supply chain finance. Ultimately, the fund aims to have a total of $150 million in committed capital by the end of 2017, which it plans to deploy by the end of 2018.