Driving long-term green investments in East Africa

British International Investment's Head of Ke & Coverage Director, Seema Dhanani, recently shared insights on operating in a high-interest environment and making green investments in East Africa. BII, as a long-term patient investor, focuses on sustainable and counter-cyclical investments, essential for economic downturns. The company's approach involves providing solutions rather than just products, particularly in climate investments such as renewable energy projects that span 20-30 years. Dhanani emphasized the significance of monitoring timelines and ensuring careful structuring for long-term investment success in the climate space. Partnerships are vital in mitigating risks and enhancing project success in emerging markets like East Africa. BII engages asset management firms, both local and global, through private equity and credit funds. For instance, BII partnered with Meridian for their Rift Valley Energy investment, leveraging Meridian's expertise in public infrastructure. The collaboration with local financial services players, like NMB Bank in Tanzania for launching a sustainability bond, underscores BII's commitment to fostering long-term partnerships for sustainable investments. The measure of success for BII's investments in the climate space is based on factors like household, business, and community impacts, energy generation, carbon emission reductions, job creation, and local industry development. BII focuses not only on the specific project outcomes but also on building ecosystems and industries to drive scalability and broader industry impact. While the Rift Valley Energy Project aims to avoid up to 20,000 tons of carbon emissions, additional benefits include increased productivity in rural areas predominant in agriculture. The provision of sustainable energy supports industries like tea and coffee plantations, milk processing, and grain processing, catering to underserved communities. Despite potential opportunities like carbon credits, BII prioritizes reliable energy provision for rural communities as the primary project goal. Addressing risks associated with investing in projects impacting vulnerable rural and agrarian communities, BII emphasizes a proactive approach to risk mitigation. Collaborating closely with partners and local stakeholders, BII works with governments to encourage necessary reforms and strategic location selections for scalable impact. Patience is crucial in such long-term projects, with examples like Rift Valley Energy taking over two years to materialize. BII enforces contingency plans and structures to accommodate the initial years of capital expenditure without immediate revenue generation, ensuring long-term sustainability and success in their green investments.