New York, March 24, 2023
African Guarantee Fund (AGF) has signed a partnership with Aqua for All to facilitate increased de-risking opportunities to finance the water, sanitation and hygiene (WASH) sector in Africa. Through the partnership, local private banks will have increased access to guarantees. In turn, local banks will be able to develop their WASH portfolios and support utilities through guarantee products and capacity building assistance.
These efforts are part of a collaborative mission to locally institutionalise de-risking solutions, building up on the initial work Aqua for All has done in the water sector and coupled with AGF’s broad experience supporting small and medium-sized enterprises (SMEs) across Africa. The increased offering will help to transform the market and scale private financing for the water sector.
Speaking during the signing ceremony at the UN Water Conference in New York, AGF Group CEO Jules Ngankam acknowledged that access to affordable credit in the water and sanitation economy remains a challenge, and guarantee products can help overcome that hurdle.
“Collaborating with Aqua for All will enhance our offering of guarantees particularly those targeting the WASH sector. We will also increase our provision of technical assistance to financial institutions, to address the capacity gaps that they face when lending to businesses in the WASH sector. Ultimately, this partnership will mobilise private sector funding, avail access to finance for WASH SMEs at a greater scale, increase safe access to water and sanitation facilities and enhance climate change adaptation and mitigation ” he said.
“Our partnership with AGF is an important step towards accelerating sustainable access to safe water and proper sanitation in Africa. This requires funding scalable, market-based solutions and facilitating access to capital by unlocking private investments. We are excited to work with AGF and to contribute with this approach based on our successes with three financial institutions in Kenya to grow their WASH portfolios since 2020.
This partnership represents a unique opportunity to scale our approach working with financial institutions in Kenya and beyond. To truly transform the market and make it more sustainable and inclusive, the water and sanitation sector needs to move away from the reliance on sovereign guaranteed loans and grant funding to de-risk water portfolios and increasingly use third-party guarantee providers like AGF that can appropriately meet the demand.” said Aqua for All’s Managing Director Josien Sluijs.