In a bid to aid cash-strapped operators of safari camps, hotels, and lodges affected by the COVID-19 pandemic, the International Finance Corporation (IFC) has injected $13 million (Sh1.79 billion) into a pan-African fund. The fund, known as the Africa Conservation and Communities Tourism Fund (ACCT Fund), aims to provide loans to ecotourism businesses in East and Southern Africa.
IFC’s investment, announced on Monday, will specifically target conservation tourism businesses in Kenya, South Africa, Tanzania, Botswana, Namibia, and Zambia, which have been facing liquidity challenges since the travel restrictions caused by the pandemic three years ago.
With this new investment, the ACCT Fund has now raised a total of $70 million (Sh9.66 billion) since its establishment in 2021. The fund was created as a structured debt vehicle by South Africa-based impact investment and advisory group, ThirdWay Partners, in partnership with US-headquartered organization The Nature Conservancy, with the goal of helping ecotourism businesses recover from the pandemic’s impacts.
The ACCT Fund is expected to have significant positive effects on the countries it invests in, estimating a contribution of over $530 million (Sh73.14 billion) through direct, indirect, and induced effects in sectors such as agriculture, retail, transportation, and recreation. It is predicted that around 21,200 full-time jobs will be created as beneficiary firms receive funding to refurbish, renovate, and expand their operations.
Sérgio Pimenta, IFC Vice President for Africa, stated, “IFC’s investment in the ACCT Fund will help financially affected ecotourism businesses to preserve jobs and contribute to the local economy. 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 saw a significant increase of 83 percent in 2022, reaching Sh268.09 billion, according to the Ministry of Tourism. This growth was attributed to the global recovery of the sector and international events held in the country. The ACCT Fund focuses on supporting businesses that align with the national tourism strategies of the countries in which they operate.
In addition to providing financial support, IFC will offer non-commercial risk mitigation and capacity building to the initiative. This includes assisting in the development of climate guidelines that will set standards for the sector and helping operators improve their environmental performance by reducing energy and water consumption and enhancing waste management.
Maarten Weehuizen, Managing Director of the ACCT Fund, emphasized the importance of tourism for the preservation of African landscapes and the well-being of the people and wildlife dependent on them. He stated, “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.”
The partnership between IFC and the ACCT Fund seeks to support the recovery and resilience of the tourism sector in beneficiary countries following the shocks caused by the Covid-19 pandemic.
Voice Of Tourism
