Growing impact investments in Kenya

August 12, 2015

Kenya has the highest concentration of impact investors and disbursed impact capital. Nearly 10 billion USD have been invested in East African countries in impact investing, out of which half of it in Kenya alone. 

 

According to a report released by UK Department for International Development (DfID), the Global Impact Investing Network (GIIN) and Open Capital Advisors, Kenya is perceived as a hub for impact investing, with investors setting offices mainly in Nairobi for operations in East Africa.

“We see the Kenyan landscape buzzing with opportunities for impact investors and counties, it is however a matter of better communication between the parties before we’ll see even more successful collaborations", emphasized Nicolai Sederberg Rottbøll  from his experience on the ground as the CEO of Quercus Group.

 

Impact investing

Impact investing refers to money that goes to organizations that promote sound environmental and social principles, besides their financial sustainability. According to the report, the Kenyan sectors in which impact investors are interested include: energy, financial services and infrastructure, while the traditional investment has focused on agriculture, financial services and housing.

 

 

Kenyan context

Kenya’s GDP grew partially due to an increased foreign direct investment.  Currently, the foreign investments comprise 0.9% of the country’s GDP. A growing number of companies open their offices or acquire other businesses mainly in Nairobi, which is perceived as a business hub in the region. Even though the impact investors present in Kenya have a global interest in this type of investment, it is expected that at least 240 million USD has been committed specifically for Kenya.

 

Impact investing in East Africa

East Africa contains 11 countries: Kenya, Uganda, Tanzania, Rwanda, Ethiopia, Burundi, Somalia, Djibouti, Eritrea, Sudan, and South Sudan. Out of these, only the first five have relatively active impact investing markets. Out of the identified 9.3 billion investments, Uganda received 13%, Tanzania 12%, while Ethiopia received a funding of 7% out of the total of impact investments.

 

For more insights on impact investing in East Africa, the report of UK Department for International Development (DfID), the Global Impact Investing Network (GIIN) and Open Capital Advisors can be found here.

 

Since 2013 Quercus Group has worked with counties and organizations in Kenya to promote regional growth. We have done this by facilitating dialogue and collaboration between public and private stakeholders, and by bridging Kenyan investment opportunities to Danish investors and companies. Read more about our Kenyan office here.

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