British International Investment

Eastern and Southern African Trade & Development Bank

Central AfricaEast AfricaNorth AfricaSouthern AfricaFinancial services

The Eastern and Southern Africa Trade and Development Bank – TDB Bank – is a regional development bank headquartered in Burundi. It has offices in Nairobi, Harare, and Ebene. Its aim is to facilitate economic growth, trade and regional integration through its role as a financial intermediary providing trade and project finance in 17 countries across East and Southern Africa. It invests in a range of sectors, including agriculture, trade, industry, infrastructure, energy and tourism and provides a range of financial products and services across both the private and public sectors.

Our investment

Description of the investment.

In 2019, BII partnered with TDB to support trade flows in some of the more challenged African markets starting with Ethiopia and with the potential to reach other smaller countries in the region. The facility which is Risk Sharing program allows TDB to increase its financing to banks in these countries in order to facilitate imports of essential commodities and other basic goods.
As at 2022, BII had through this facility supported a total volume of US$122m in essential import to Ethiopia during difficult political and economic periods in the country. The facility was downsized from US$75m to US$50m on account to TDB’s needs and limited use of the facility outside Ethiopia.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact

Sustained and potentially improved economic opportunities (SDG 8.1, 8.5).

How?

How?

Economic enabler: This facility will allow the Trade Development Bank (TDB) to provide short-term (less than two years) trade finance products (e.g. pre-/post-shipment loans, import finance facilities) to corporates in Africa. The corporates will mostly be existing private sector clients requiring renewal or top-up loans, but may expand to new borrowers as economies emerge from the COVID-19 crisis. Increased credit will enable corporates to continue to import/export strategic inputs, agricultural or commodity goods. This will sustain and potentially increase business operations.

Who?

Stakeholder Geography Characteristics
Employees, suppliers, customers

Pan-Africa; 99 per cent exposure to category A and B countries in the trade finance portfolio.

Given diversity of sectors, employee/suppliers will be low and high-skilled. Key sectors include infrastructure, energy, agribusiness and banking; The characteristics of corporates reached are assumed to be large as TDB extends direct ticket lines to these businesses ($10 to 50 million).

How much?

Scale Depth/Duration

The trade finance portfolio is expected to grow by approximately 15 per cent year-on-year. Based on an illustrative pipeline, CDC's loan is expected to support four to six facilities depending on the tenor of the underlying loan. (Projections have been adjusted to reflect the COVID-19 market context.)

  • Duration: Impact is connected to loan book growth and will occur over two years or the lifecycle of the facility.
  • Depth: Limited visibility on depth. The World Bank recently adjusted growth projections for Africa from 2.4 per cent in 2019 to -2.1 to -5.1 per cent in 2020. As a result, impact is expected to be deeper in a context of increasing unemployment and lower access to goods/services). Countries with smaller/less developed capital markets ex. A & B countries, will feel the effects of COVID-19 more acutely than more developed markets.

Risk

Alignment Risk
  • Alignment: Risk relating to use of proceeds include: (i) using the facility to refinance facilities; (ii) expressed preference for a longer tenor. Mitigation: the use of proceeds is contractually limited to short-term lines (less than two years) excluding refinanced facilities. Visibility on incremental/new growth is limited to reporting on the use of our facility but CDC will also monitor overall growth of TDB's portfolio (bi-annual reporting).
Alignment Risk
  • Alignment: Risk relating to TDB's reach as the bank services (i) sovereign clients and has an (ii) oil and gas exposure. Mitigation: (i) is mitigated to a certain extent by limiting use of proceeds to private sector clients; (ii) ensuring that the facility is aligned with our Climate Change Policy. The majority are petroleum imports to category A and B countries which TDB recognises as strategic commodities to these countries.
Evidence Risk

Environmental and social information

  • Environmental and social summary

    A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.

  • Environmental and social risk

    A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.

Environmental and social summary

We are supporting TDB to take steps towards building and integrating climate change considerations as part of the bank's operations. We also continue to work closely with TDB to improve its existing ESG, and human resources/safeguarding policies.

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    First published

    When the investment was first published on the website database.

    :
    October 2023
    Last updated

    When the last quarterly update of the website database occurred.

    :
    June 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D4078
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    Central Africa, East Africa, North Africa, Southern Africa
    Country

    The countries where the investment delivers impact. Where impact is delivered in multiple countries, this is indicated.

    :
    Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eswatini, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Mozambique, Rwanda, Seychelles, South Sudan, Sudan, Tanzania, Uganda, Zambia, Zimbabwe
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Financial services

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Guarantee
    Start date :
    May 2023
    Amount :
    $-25m
    Currency of investment :
    USD
    Domicile

    The company or investment fund’s place of incorporation.

    :
    Mauritius

Related investments made by BII into this company:

Investment name Commitment Region Sector Start date Status
Investment 01 $50m Central Africa, East Africa, North Africa, Southern Africa Financial services June 2016 Exited
Investment 02 $50m Central Africa, East Africa, North Africa, Southern AfricaCentral Africa, East Africa, North Africa, Southern Africa Financial services May 2018 Active
Investment 03 $75m Central Africa, East Africa, North Africa, Southern AfricaCentral Africa, East Africa, North Africa, Southern AfricaCentral Africa, East Africa, North Africa, Southern Africa Financial services December 2019 Active
Investment 04 $100m Central Africa, East Africa, North Africa, Southern AfricaCentral Africa, East Africa, North Africa, Southern AfricaCentral Africa, East Africa, North Africa, Southern AfricaCentral Africa, East Africa, North Africa, Southern Africa Financial services December 2020 Exited
Investment 06 $100m Central Africa, East Africa, North Africa, Southern AfricaCentral Africa, East Africa, North Africa, Southern AfricaCentral Africa, East Africa, North Africa, Southern AfricaCentral Africa, East Africa, North Africa, Southern AfricaCentral Africa, East Africa, North Africa, Southern Africa Financial services December 2023 Active

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