Bond combines compelling financial returns with meaningful conservation benefits
NAIROBI (Kenya) and ARUSHA (Tanzania), 14 January 2014 –
Asilia Africa (Asilia), a leading up-market nature travel operator with an iconic portfolio of 12 camps & lodges in crucial natural habitats in Tanzania & Kenya, and African Wildlife Capital (AWC), a Mauritius-based conservation enterprise investment company founded by the African Wildlife Foundation, are delighted to announce the closing of a pioneering Conservation Bond with a principal of US$2 million. The subordinated bond has a 10-year term and will be used to finance the expansion of Asilia in the coming years.
The bond has an innovative interest rebate mechanism linked to two sets of clearly defined, quantifiable, and measurable conservation targets. The achievement of these targets by Asilia will trigger a lowering of the annual interest rate by a maximum of 2 percent. The first set of targets is linked to Asilia playing an active role in the development of new conservation areas that do not yet enjoy any form of formal protection. The second set is linked to the realisation of meaningful tourism flows to existing or new conservation areas that are currently underutilised. These targets recognise that that formal protection combined with healthy tourism flows is crucial to the conservation of wildlife and natural habitats.
“The AWC bond is an innovative and exciting financing instrument that incentivises Asilia to deliver on its vision of developing tourism in pioneering destinations where wildlife is often under significant pressure from poaching, overgrazing, uncontrolled human development, and other threats,” says Asilia Co-Founder and Managing Director Jeroen Harderwijk. “This transaction creates a clear linkage between Asilia’s operations, its long-term conservation and community development ambitions, and its funding structure. We can generate a significant interest rate reduction, thus lowering the cost of capital for such projects. Investors realise their financial return and directly support conservation efforts. It has been a pleasure to work with AWC in the structuring and execution of this transaction, and we hope that this is the start of a long and mutually beneficial partnership.”
“African Wildlife Capital has a long-term investment horizon, and with our B-Corp status, GIIRS rating, and recognition as a ‘Best for the World’ company for 2013, this is another sign of support for our profitable and sustainable business model and our positive impact strategy,” says Asilia’s other Co-Founder and Commercial Director, Bas Hochstenbach. “We regularly need to take a long-term view when developing uncharted, pristine destinations, and it is of crucial importance that we have a capital structure that is aligned to that view. We are proud to partner with AWC and all it stands for.”
The decision to partner with Asilia was based on a number of factors, says AWC Investment Manager Giles Davies. “The tourism industry is one of very few that is able to monetise the value of wildlife and nature so, properly managed, it can be of great importance both for conservation as well as Africa’s wider economic development,” says Davies. “Accordingly, it is a core focus for African Wildlife Capital and our investors. That said, it is essential for us to also choose the right investee companies and with Asilia, we are delighted to have discovered a high-impact management team and shareholder group with a vision that dovetails perfectly with our own.
Davies highlights the fact that Asilia is one of the larger industry players in East Africa. The entrance of Norfund in Asilia’s share capital further exemplifies the deserved recognition the company is generating, he says.
“We are partnering with them to support a carefully planned growth trajectory in the coming years,” Davies remarks. “They have a track record that shows they have the capabilities to deliver on their strategic ambitions and very strong governance standards. If there is one company that can deliver on the development of tourism in pioneering areas and make these areas into a commercial and
conservation success, it is Asilia.”