IFC announced an investment in the Africa Conservation and Communities Tourism Fund (ACCT Fund) to help the post-pandemic recovery and long-term expansion of Sub-Saharan Africa’s ecotourism sector.
The IFC’s $13 million investment will benefit ecotourism enterprises in and near conservation areas in East and Southern Africa, with a particular emphasis on South Africa, Botswana, Kenya, Namibia, Tanzania, and Zambia. The ACCT Fund will invest in safari camp, hotel, and lodge businesses to help them manage financial issues while recovering from the COVID-19 outbreak.
The fund also assists them in refurbishing, renovating, and expanding their operations, particularly where the enterprises might have a significant conservation and community development impact.
In response to COVID-19-related problems facing the ecotourism sector, ThirdWay Partners, an impact investing and consultancy firm, and The Nature Conservancy, a global environmental non-profit organization, formed the ACCT Fund, a structured loan vehicle, in 2021.
According to IFC projections, the ACCT Fund will contribute at least $530 million to the economies in which it invests through direct, indirect, and induced benefits in agricultural, retail, transportation, and recreation. According to IFC, the investment will also save approximately 21,200 full-time employment.
“We are grateful for IFC’s support for this innovative and very important initiative,” stated Maarten Weehuizen, Managing Director of the ACCT Fund. “The ACCT Fund is an impact investment vehicle that strikes a balance between financial objectives and 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 wildlife who depend on them,” Weehuizen added. “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.”
Ecotourism companies are dedicated to safeguarding the environment and wildlife in the areas where they operate.
“As part of this innovative blended finance approach, IFC has partnered with the Nature Conservancy, a global environmental conservation organization, to support sustainable ecotourism and deliver impact to small tourism operators,” said Sérgio Pimenta, Vice President of the IFC for Africa. “The IFC’s investment in the ACCT Fund will assist financially disadvantaged ecotourism businesses in retaining jobs and contributing to the local economy.” The collaboration coincides with the IFC’s aim to promote the revitalization of domestic and regional tourism industries, as well as to use a variety of funding options to support nations’ development priorities.”
The fund has already completed its final close, with a total of $70 million raised thanks to IFC and other investors. The ACCT Fund is designed with three capital tranches: grant funding, junior equity funding, and senior equity funding. In the senior equity tranche, IFC will contribute up to $13 million.
In addition to financing, IFC will provide non-commercial risk mitigation and capacity building by assisting in the development of climate guidelines, which will help set standards for the sector and assist operators in improving their environmental performance by reducing energy and water use and improving waste management.
The ACCT Fund is firmly integrated with the beneficiary nations’ national tourism strategies, which were established to promote the recovery and resilience of their respective tourism businesses following the COVID-19 epidemic.
The ACCT Fund is consistent with the World Bank Group’s goals of eradicating extreme poverty and promoting shared prosperity, as well as the World Bank Group’s Green Resilient and Inclusive Development (GRID) framework, which aims to repair structural damage caused by COVID-19, accelerate climate change mitigation and adaptation, and support a strong and sustainable recovery.
The ACCT Fund was initially established to provide flexible bridge financing to conservation tourism businesses in Sub-Saharan Africa that had been severely impacted by the COVID-19 pandemic and resulting travel restrictions, in order to support job retention, continued payment of conservation area fees, and other ongoing conservation and community development initiatives.
As the sector recovers from the COVID-19 epidemic, the ACCT Fund has expanded to include a more holistic focus on the sustainable expansion of conservation tourism activities in high-value conservation regions in order to stimulate substantial and incremental conservation and community impact.