Category Archives: Proparco

I&M Bank Rwanda IPO Launched

Yesterday, I&M Bank Rwanda launched an IPO share sale that will result in the listing of the bank’s entire share capital at the Rwanda Stock Exchange. The Government of Rwanda will sell its entire 19.81% in the bank as part of its divestment from public enterprise policy, and through the sale of 90 million shares of the bank, they hope to raise 8.9 billion francs (~$10.8 million), which will go to the Rwanda government after deducting expenses.

Quick Notes

  • Minimum is 1,000 shares at RWF 90 per share, therefore the cost of investment is RWF 90,000 (~approx $109 or Kshs 11,350). Further purchases are in blocks of 100 shares.
  • Opens 14 February, closes 3 March 2017.
  • Allotment plan: 40% of the shares are reserved for international investors and 60% for domestic investors. The domestic pool is further broken down with 25% reserved for East African nationals, 5% for employees of the bank, 15% for Rwanda institutional investors (QII’s) and 15% for other East African QII’s.
  • The Plan is to list and trade the shares, in Kigali, as ‘IMR’ from 31 March 2017.

IN 2015, I&M Bank Rwanda (IMR) was the 3rd largest bank in Rwanda by assets (RWF 171 billion), behind Bank of Kigali (RWF 561 billion), and Cogebanque (RWF 178 billion). Other banks were KCB Rwanda (RWF 149 billion) and Equity Rwanda (RWF 93 billion). For 2016, IMR had assets of 206 billion francs in 2016, loans of 111 billion and deposits of 134 billion and a pretax profit of 8.4 billion francs. It’ has 17 branches, and plans to build a new headquarters ($25M) and install a new IT system ($4M). It’s business is in four mains sectors – construction, wholesale & retail, manufacturing, and agriculture.

I&M Bank Rwanda (formerly Banque Commerciale du Rwanda Limited – BCR) is the Rwanda subsidiary of I&M Holdings Limited. I&M Holdings listed on the Nairobi Securities exchange in June 2013. It is the oldest financial institution with over 50 years of existence and the first bank in Rwanda, having been incorporated in 1963Actis recapitalized the bank and became an 80% owner in 2004 and sold that 80% stake in 2012 to I&M (55%) and the governments of Germany and France who, through their development finance institutions of DEG and Proparco respectively, each retain 12.5%.

Odd points

  • IMR has entered three snap transaction with the National Bank of Rwanda regulator) in which I&M has given $8 million to the regulator in exchange for local currency. I&M will receive 2% interest and pay the NBR 8% interest in local currency.
  •  In Rwanda, bank directors sign conflict of interest statements?!

More details in the prospectus from Dyer & Blair Investment Bank, who, along with BARAKA Capital Limited Uganda, are Lead Transaction Advisors. BARAKA Capital Rwanda is the Lead Sponsoring Broker.

1 KES = 7.93 RWF and 1 USD = 823 RWF

Chase & AFD to Finance Renewable Energy in Kenya

This morning, Chase Bank and Agence Française de Développement (AFD) signed a 10 million Euro (~Kshs 1.12 billion), 12 year, credit line for onward lending to businesses that wish to invest in renewable energy projects.

Paul Njaga, the CEO of Chase said that, at the Global Entrepreneurship Summit (GES), the bank had committed Kshs 60 billion to SME funding, and that so far Kshs 20 billion had been disbursed. They had got $40 million from Proparco for SME’s and that the new funding will go to bankable projects in solar, wind, hydro, geothermal, biomass etc. that don’t degrade the environment, as well as as for energy efficiency measures.

The French Ambassador said their renewable energy project, which was launched in 2010, has been great success; To date, $37 million has been used for renewable energy projects that collectively generate 22 MW, and some of these included mini-hydro plants at KTDA tea estates, and the Strathmore University solar roof. He said France has invested 1.5 billion Euros in Kenya over the last ten years, including project through Proparco, their private sector investing subsidiary.

The Kenya Association of Manufactures (KAM) will assist the projects sponsors on feasibility studies and technical support and AFD hopes to sign five more banks in the renewable energy scheme and extend it to Tanzania and Uganda.

Conversion: 1 EUR = Kshs 111, 1 US$ = Kshs 102.

Proparco in East Africa

French financier Proparco had a mini cocktail while their CEO Luc Rigouzzo was in Nairobi last week. The CEO, who grew up in Africa (Ivory Coast) talked about the group investments and potential they see in Africa, being real, not just afro-optimism statement.

In the banking sector, Africa with its 1 billion combined population has a potential urban population of 300 million banking customers, hence Proparco’ intervention in the banking sector as well as infrastructure sectors

Proparco with € 1.5 billion assets has 37% of loans and 26% of equity investments to Africa, and their loan portfolio at 2008 comprised 146 million Euros in east & central Africa, and 154m Euros in West Africa
Proparco invests in social, environmental investments for the public good and that transom poverty.

The consumer may not see or feel this kind as Proparco’s intervention is at a higher level with loans of € 5 to 30 million per project (over durations of 5 to 20 years) and up to to 100m in infrastructure, and equity of € 2 to 20 million (over 4 to 10 years)

Tea estate

In Kenya they have invested in Mumias sugar, I&M bank, Zain, Bank of Africa, Serena Hotels, KTDA) , NIC Bank, Rabai Power, Kenafric. Ormat (Geothermal), while Uganda has bugajali hydro power, DFCU, and in Tanzania they have Tigo.