EIB, Norsad Capital Announce New €10m Business Financing Loan For Botswana

(AFRICAN EXAMINER) – European Investment Bank (EIB) has announced a new €10 million long-term financing initiative aimed at supporting entrepreneurs and businesses across Botswana with a leading local partner, Norsad Capital.

The initiative represents the first targeted EIB support for private-sector financing to help Botswana companies impacted by COVID-19 and is part of the EIB’s engagement with financial partners across Africa to strengthen economic resilience to the pandemic.

The new partnership between the EIB, the world’s largest international public bank, and Norsad Capital, an impact investor and leading private debt company in Africa, will increase access to long-term finance for businesses across Botswana and strengthen economic resilience to challenges of the COVID-19 pandemic.

This, according to a joint statement by both organizations, builds on close cooperation in recent years to support private sector investment across the country.

The new business financing will also support investment in manufacturing, agriculture, services and trading companies across the country.

The collaboration was formally announced in Gaborone by the Chief Executive Officer (CEO) of Norsad Capital, Kenny Nwosu, and Jim Hodges, EIB regional representative to Southern Africa.

The 10-year €10 million EIB loan to Norsad Capital will allow new financing to be provided to private businesses, notably small and medium-sized enterprises, across Botswana. It will also allow longer average loan tenors for business loans and enable companies to better reflect the economic life of new investment and ensuring that Botswana benefits from rapid EIB response to strengthen economic resilience to COVID

The package which represents the EIB’s first support for business investment in Botswana in eight years, is part of the EIB’s increased engagement across Africa to ensure that companies can continue to access finance when faced with unprecedented health, business and trade challenges linked to COVID-19. The investment was approved by European Union finance ministers in April 2020, within weeks of the impact of the pandemic being recognised.

According to Nosad Capital CEO, companies across Botswana have been impacted by health, trade and business challenges triggered by the COVID-19 pandemic. Nwosu however, assured that the company will target qualifying private-sector investments across the country seeking to create economic opportunities.

“The €10 million EIB backing for companies across Botswana will unlock new private-sector financing, that will have a positive impact on livelihoods. The close cooperation between the Norsad Capital and EIB teams over recent months has unlocked access to longer-term loans that are essential for businesses to grow during challenging times and ensures that Botswana benefits from the EIB’s engagement to strengthen economic resilience to COVID across Africa”, he said.

EIB’s Vice President, Thomas Östros noted that increasing access to finance by entrepreneurs and businesses is essential to address business uncertainties and overcome economic challenges exacerbated by COVID-19.

Today’s new agreement demonstrates how European Union and African partners together are helping to beat COVID and ensure that private sector business can invest, create jobs and grow. As part of Team Europe, the EIB is pleased to provide €10 million of new targeted financing to Norsad Capital to unlock new private-sector financing essential to strengthen private-sector investment, create jobs and accelerate the post-pandemic recovery of Botswana”, he added.

Similarly, the Head of the Delegation of the European Union to Botswana, Ambassador Jan Sadek said the European Union is committed to supporting the private sector in Africa, adding that Team Europe cooperation with the EIB will increase access to targeted business finance by companies across Botswana.

“Helping private sector resilience with the new €10 million financing scheme will create jobs, unlock business growth and enable Botswana companies to seize new business opportunities in the years ahead”, he stressed.