The International Finance Corporation has injected $13 million (Sh1.79 billion) into a pan-African fund, enabling cash-strapped operators of safari camps, hotels and lodges to access loans to recover from lingering shocks of the pandemic.
IFC said on Monday the investment in Africa Conservation and Communities Tourism Fund (ACCT Fund) targets ecotourism businesses in East and Southern Africa.
Conservation tourism in Kenya, South Africa, Tanzania, Botswana, Namibia and Zambia facing liquidity challenges that emanated from the Covid-induced travel restrictions three years ago will be prioritised under IFC’s new investment.
The new senior equity tranche from World Bank Group’s private sector lending arm now brings the cash mobilized by ACCT Fund to $70 million (Sh9.66 billion) since its establishment in 2021.
The Fund was set up by South Africa-based impact investment and advisory group, ThirdWay Partners, in partnership with US-headquartered The Nature Conservancy as a structured debt vehicle to help businesses in ecotourism recover from the pandemic shocks.
IFC estimates the ACCT Fund will contribute upwards of $530 million (Sh73.14 billion) to countries where it invests through direct, indirect and induced effects in agriculture, retail, transportation and recreational sectors.
This will, in turn, create about 21,200 full-time jobs as beneficiary firms get funds to refurbish, renovate, and expand their operations, it added.
“IFC’s investment in the ACCT Fund will help financially affected ecotourism businesses to preserve jobs and contribute to the local economy,” Sérgio Pimenta, IFC Vice President for Africa, said in a statement.
“The partnership aligns with IFC’s strategy to support the revival of domestic and regional tourism markets, and to use a blend of financing tools to support countries’ development priorities.”
Kenya’s tourism earnings rose 83 percent in 2022 to Sh268.09 billion in 2022, the ministry announced in February, citing global recovery in the sector and campaigns boosting international events in the country.
The ACCT Fund supports businesses whose operations are aligned with the national tourism strategies of the countries they are situated.
The funding largely targets projects developed to support the recovery and resilience of tourism sectors in beneficiary countries after the Covid-19 pandemic shocks.
“The ACCT Fund is an impact investment vehicle which balances financial goals with a clear conservation and community impact agenda. Tourism is critical to the long-term survival of conservation landscapes across the African continent, to the benefit of the people and the wildlife who depend on them,” ACCT Fund managing director Maarten Weehuizen said in the statement.
“Even prior to the Covid pandemic, these areas were under significant pressure; tourism provides jobs in rural areas, funding for nature protection and its activities with guests in these landscapes significantly reduce the risk of poaching, deforestation and land conversion.”
Besides cash injection, IFC will provide non-commercial risk mitigation and capacity building to the initiative by supporting the development of climate guidelines that will contribute to setting standards for the sector.
IFC will also help operators improve environmental performance by reducing energy and water use and improving waste management.