Legal team size: Four

Major legal advisers or external counsel: Trinity, A&O Shearman, Hunton Andrews Kurth, HSF, Gide, NRF

What are the most significant cases and transactions that your legal team has recently been involved in?

Cygnum Capital is an investment banking and asset management firm with a focus on frontier and emerging economies across Africa, Asia, and the Middle East, advising clients on “first-of-their-kind” transactions across key sectors including critical minerals, renewable energy, financial services, infrastructure, power, healthcare and real estate.

Cygnum Capital affiliates in the UK and the Netherlands are the fund managers of five pioneering funds, domiciled in Luxembourg and Mauritius with approximately US$900mn of assets under management in Africa, with a particular focus on clean energy, energy efficiency, energy access and capital markets development. The legal team, spanning our international offices, supports in structuring and executing 50+ transactions per year. A sample of recent investments include:

For the Africa Local Currency Bond Fund (ALCB Fund)

On the investment side, the fund has acted as investor or anchor investor in a number of innovative transactions including Tanzania’s first green bond and first sustainable bond, Zambia’s first green bond (for which Cygnum Capital acted as Lead Arranger), an Ivorian social bond and securitisation, the first bond issued by a microfinance institution in Sierra Leone and the first sub-national bond issued in East Africa.

On the fundraising side, the fund secured a EUR 100 million guarantee facility, provided by KfW with funding by the EU EFSD+ programme, to enable the fund to further reduce its funding costs and facilitate local currency borrowing, and launched its own EUR 150 million EMTN programme, with DEG providing a 5-year initial anchor investment of EUR 25 million. This is part of the Fund’s approach to increase private-capital mobilisation and crowding-in European institutional investors.

For the Facility for Energy Inclusion (FEI-ONGRID LP)

Multijurisdictional syndicated portfolio-based funding to an energy services group, enabling the decarbonization of telco networks, across Senegal, Madagascar, Cote d’Ivoire, Chad, Burkina Faso, Cameroon and Niger.

Secured financing company for solar mini grids in Zambia

Bridge financings to finance renewable energy assets for mobile network operators in South Sudan, and to finance the expansion of rural mobile networks in Cameroon and DRC.

For the Africa Go Green Fund (AGG)

Senior secured debt for electric motorcycle battery production in Rwanda. Joint investment for energy efficient cookstove distribution via a carbon finance SPV in Mozambique, Nigeria and the DRC.

For the Facility for Energy Inclusion Offgrid (FEI-OGEF) and AGG

Senior secured syndicated facility to a leading solar home system and fintech provider in East Africa.

Investment in an off-balance sheet securitisation structure for solar home systems receivables across several African jurisdictions.

Which recent political, economic or regulatory changes have impacted your work the most in recent years?

The macro-environment has been challenging for emerging and frontier markets in recent years, impacted by high inflation, rising interest rates, commodity prices and the conflict in Ukraine. However, even as more advanced economies continue to struggle, the IMF projects that the East African economy will accelerate to 5.7% growth this year, and across Cygnum Capital’s focus sectors, climate finance, infrastructure development and renewable energy remain high on the international agenda.

Of particular interest to our sectors, we see the ongoing development and mainstreaming of sustainable financing products across the loan and bond markets, and voluntary carbon markets are re-emerging, offering potentially attractive opportunities as well as many legal and regulatory challenges, including fast emerging regulations across African jurisdictions and ongoing ESG regulatory developments in Europe.

Are there any causes, business or otherwise, that you are passionate about?

Private sector development as a driver of economic development, diversity and inclusion in the financial sector and (as the co-owner of a running business), I would have to say promotion of inclusive recreational running in East Africa.