- EUR10m/P127.1m loan to assist local companies overcome COVID-19 effects
Leading impact investor, Norsad Capital, has partnered with the European Investment Bank (EIB) to avail EUR10 million or P127.1 million to help Botswana businesses recover after the coronavirus recession.
Signalling the first EIB partnership with Norsad, a joint announcement from the two entities states that the EIB agreed to offer finances amounting to P127.1 million as a loan in the new long-term financing for entrepreneurs and businesses across Botswana.
“This 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,” reads the announcement.
According to the release, the new partnership between the EIB and Norsad Capital will increase access to long-term finance for Batswana businesses, thereby strengthening economic resilience to the negative effects posed by the COVID-19 pandemic.
It states that the new business financing will be targeting investments in manufacturing, agriculture, services and trading companies across the country. Captured speaking at the signing ceremony held a fortnight ago, the CEO of Norsad Capital, Kenny Nwosu, said: “Companies across Botswana have been impacted by health, trade and business challenges triggered by the COVID-19 pandemic.” He noted that in order to create economic opportunities, Norsad Capital will be targeting qualifying private-sector investments across the country.
“The EUR10 million European Investment Bank backing for companies across Botswana will unlock new private-sector financing that will have a positive impact on livelihoods,” Nwosu said. “The close cooperation between 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.”
Thomas Östros, Vice President of the EIB. noted that the agreement is a clear demonstration of how the European Union and Africans partnered to deal with the devastating effects of the pandemic. He emphasised that this will unlock private-sector financing and strengthen investments as well as creating jobs for Botswana post the pandemic recovery.
For his part, Ambassador Jan Sadek, Head of the Delegation of the European Union to Botswana and SADC said the funding will help Botswana companies tap into new opportunities. “The Team Europe cooperation with the European Investment Bank will increase access to targeted business finance by companies across Botswana,” he said. As explained by the partnering firms, the loan availed by EIB to Norsad will be for private sector businesses but largely focused on small and medium-sized enterprises.
The EIB is the world’s largest international public bank that is owned directly by the 27 European Union member states while Norsad Capital is an impact investor and leading private debt company in Africa. Norsad was first established in 1990, a collaboration between the Nordic and Southern African Development Community (SADC) governments, and operated as a multilateral agency based in Lusaka, Zambia.
In 2011, EIB said it transformed into a limited liability company, Norsad Finance, incorporated in Botswana and accredited by the International Financial Services Centre. In 2022, it rebranded to Norsad Capital in line with its strategy to scale and deepen our impact in Africa. The EIB said the scheme is part of its increased engagements in Africa where the bank intends to ensure companies across different sectors have access to finances as a result of the impacts of COVID-19.