Economy
IFC Invests $5m in Equator Fund to Drive Climate Tech Financing in Africa
By Adedapo Adesanya
The International Finance Corporation (IFC) has announced a $5 million investment in the larger $54 million pool of Equator Africa Fund I, as part of its drive to bridge the persistent financing gaps that exist in Africa for climate tech innovation.
This marks its first-ever investment in a venture capital fund entirely focused on supporting businesses and innovation in the climate sector.
Equator Africa is backing early-stage, tech-enabled companies in sub-Saharan Africa, including those working on green solutions in the energy, agriculture, and mobility sectors. The fund achieved a first close of $40 million in April 2023.
Africa is the continent most vulnerable to the effects of climate change but also stands to benefit from sustainable solutions delivered by up-and-coming tech companies. The fund’s primary geographic focus is expected to be Kenya and Nigeria, but it has invested in companies with operations across the continent, including in Côte D’Ivoire, Ghana, Madagascar, Senegal, Sierra Leone, South Africa and Zambia.
IFC’s investment is supported by a $1.5 million guarantee from the Korea Green Resilient and Innovative Development (K-GRID) Programme, a $30 million initiative by the Government of Korea to support IFC projects that help reduce or avoid greenhouse gas emissions and facilitate the development and commercialization of technologies to improve climate mitigation.
IFC’s investment in Equator was made through its new $225 million Africa, Middle East, Central Asia, and Pakistan Venture Capital Platform which seeks to strengthen venture capital ecosystems and invest in early-stage companies addressing development challenges through technological innovations in climate, health care, education, agriculture, e-commerce, and other sectors.
Speaking on the funding, Mr Nijhad Jamal, Managing Partner at Equator, said, “We are thrilled to have IFC participate in our fund and support Equator’s mandate to invest in technology-enabled, early-stage ventures that are accelerating an equitable climate transition in sub-Saharan Africa. Together we hope to address a critical financing gap for Seed and Series A-stage climate-tech companies as they scale in the region.”
Adding his input, Mr Farid Fezoua, IFC’s Global Director for Disruptive Technologies, Services, and Funds, said, “Climate tech is an exciting area of innovation and impact in Africa, where businesses are helping economies grow while reducing emissions and resource use. IFC’s investment in Equator Africa reflects our commitment to supporting those businesses to deliver solutions, from renewable energy to electric vehicles.”
The fund has already invested in six companies including SunCulture, which provides solar-powered energy and irrigation systems to farmers; Roam, which designs and develops EV motorbikes and electric buses; Odyssey, a data and tech platform for investment and asset management for distributed renewable energy infrastructure; Apollo Agriculture, which provides input financing and advisory services to smallholder farmers; Ibisa, which provides parametric insurance products for climate risks; and Downforce Technologies, which makes soil organic carbon measurement technology accessible and affordable.
Other notable limited partners in the fund include British International Investment (BII), the Global Energy Alliance for People and Planet (GEAPP), Shell Foundation, DOEN Participaties, and Proparco.
In addition to capital, IFC is also expected to provide support around environmental and social governance and gender.
By Adedapo Adesanya
The pump price of petrol will likely increase in coming weeks as the landing cost of a litre of imported Premium Motor Spirit (PMS) into the country increased by N88 from N797 per litre last week to N885 per litre this week.
This informing is according to the latest data from the Major Energies Marketers Association of Nigeria (MOMAN) on Wednesday.
The association confirmed the rise in the landing cost in its daily energy bulletin released on Wednesday, arguing that price changes are inevitable in a deregulated market.
The new landing cost is N25 higher than the N860 per litre that end-user customers pay for Dangote petrol from MRS and other partners.
Similarly, the Dangote refinery’s ex-depot petrol price is N815 per litre, N70 lower than the new landing cost..
The landing cost fell from about N927 below Dangote’s ex-depot price, forcing the refinery to react with a price cut.
The development resulted in the loss of billions of Naira by marketers as they were made to sell petrol below their costs.
There are, however, indications that this may lead to increase in petrol prices in the coming weeks as a result of the disagreement between the Dangote refinery and the Nigerian National Petroleum Company (NNPC) Limited over the Naira-for-crude deal and the rise in the landing cost.
While announcing the suspension of the sale of the product in local currency last week, the Dangote Group said, “Dear valued customers, we wish to inform you that the Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in naira. This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in US dollars.
“To date, our sales of petroleum products in naira have exceeded the value of naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency.”
Immediately after the announcement, the cost of loading petrol at private depots in Lagos jumped to about N900/litre.
In a related development, seven vessels carrying imported PMS were expected to berth at seaports along the nation’s borders between March 17 and 23.
These vessels, carrying 115,000 metric tonnes, representing 154.22 million litres of PMS, brought in products through three seaports – Tincan port in Lagos, the Lekki Deep Seaport in Lagos, and the Calabar port – to improve fuel supply nationwide.
Introduction
Trading in futures and options (F&O) has become a popular way to diversify investments and hedge risks in the financial markets. With the right knowledge and strategy, anyone can start trading and leverage F&O to maximize returns. This guide will walk you through the fundamentals of business with futures and options, how to start trading, and essential strategies for success.
Understanding Futures and Options
What Are Futures?
A futures contract is a financial agreement to buy or sell an asset (stocks, commodities, or indices) at a predetermined price on a future date and to start future and option trading futures and options. Futures are standardized contracts traded on exchanges like NSE (National Stock Exchange) and BSE (Bombay Stock Exchange).
Key Features of Futures Contracts:
- Obligatory Execution: Buyers and sellers must fulfill the contract on the expiry date.
- Margin Trading: Traders only pay a fraction of the total contract value as a margin.
- Leverage: Investors can take large positions with limited capital.
What Are Options?
Options give traders the right (but not the obligation) to buy or sell an asset at a specific price before or on the contract expiry date.
Types of Options:
- Call Options – Gives the right to buy an asset at a fixed price.
- Put Options – Gives the right to sell an asset at a fixed price.
Why Trade Futures and Options?
- Hedging Against Market Risks: Investors use F&O to hedge risks in volatile markets.
- High Leverage: Traders can control large positions with minimal capital.
- Profit in Bull and Bear Markets: Options trading allows earning from both rising and falling markets.
- Portfolio Diversification: F&O trading provides exposure to various asset classes.
How to Start Trading in Futures and Options
1. Open a Trading and Demat Account
To trade in F&O and how to start trading you need a Demat and trading account with a registered stockbroker.
Steps to Open an Account:
- Choose a SEBI-registered stockbroker (e.g., Zerodha, Upstox, Angel Broking).
- Submit KYC documents (PAN, Aadhaar, bank details, income proof).
- Complete account verification and receive login credentials.
2. Understand Market Fundamentals
Before trading, gain knowledge about:
- Stock Market Trends: Track NIFTY, SENSEX, and India VIX to understand volatility.
- Fundamental and Technical Analysis: Learn to analyze financial reports and price charts.
- Option Greeks (Delta, Gamma, Theta, Vega): These help in assessing option price movements.
3. Learn About Margin Requirements
Trading in F&O requires margin money, which varies based on contract size and market conditions. Stockbrokers provide margin calculators to help traders plan their positions.
4. Choose the Right Trading Strategy
Popular Futures Trading Strategies:
- Trend Following Strategy – Buy futures in an uptrend, sell in a downtrend.
- Spread Trading – Buy and sell futures contracts simultaneously to minimize risk.
- Scalping – Profit from small price movements by making multiple trades.
Popular Options Trading Strategies:
- Covered Call Strategy – Holding a stock while selling call options to earn premiums.
- Straddle Strategy – Buying both a call and put option to profit from high volatility.
- Iron Condor Strategy – Combining multiple options contracts to limit risk and enhance returns.
5. Start Trading with a Demo Account
Most stockbrokers provide paper trading accounts where beginners can practice trading without real money. This helps in understanding price movements, placing orders, and managing risk.
6. Monitor and Manage Risks
- Stop-Loss Orders: Protect against significant losses by setting stop-loss levels.
- Position Sizing: Avoid investing all capital in a single trade.
- News & Events: Track financial news, RBI policies, and corporate earnings reports.
Essential Tips for Successful F&O Trading
- Start Small: Begin with a few contracts and increase exposure gradually.
- Stay Updated: Follow market news, economic indicators, and stock trends.
- Avoid Overtrading: Excessive trading can lead to high brokerage fees and losses.
- Maintain a Trading Journal: Keep records of trades to analyze mistakes and improve strategies.
- Use Hedging Techniques: Reduce risk by using protective puts and call options.
Conclusion
Trading in futures and options is a powerful way to maximize investment opportunities and manage risks. By understanding market trends, choosing the right strategies, and practicing risk management, traders can build a profitable trading career. If you’re new to F&O trading, start with a Demat account, practice with demo trades, and gradually scale up as you gain confidence.
With the right approach, trading in futures and options can be a lucrative business venture and a strong financial tool for long-term success.
By Adedapo Adesanya
The duo of Okitipupa Plc and Geo-Fluids Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.75 per cent on Thursday, March 26.
This depleted the market capitalisation by N14 billion to N1.915 trillion from the N1.929 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) decreased by 14.40 points to 3,315.21 points from 3,340.14 points.
Okitipupa Plc went down by N28.50 during the trading day to N256.50 per share from Tuesday’s closing value of N285.00 per share, and Geo-Fluids Plc crashed by 5 Kobo to close at N2.65 per unit versus N2.70 per unit.
There was an increase of 78.22 per cent in the volume of securities transacted to 30,026 units from the 16,848 units transacted in the previous trading day, there was a 15.59 per cent growth in the value of transactions to N3.7 million from N3.2 million, and the number of deals completed by the market participants increased by 225.00 per cent to 13 deals from the four deals recorded a day earlier.
At the close of business, Impresit Bakolori Plc was the most traded stock by volume on a year-to-date basis with 533.9 million units worth N520.9 million, the second position was occupied by Industrial and General Insurance (IGI) Plc with 70.0 million units sold for N23.8 million, and the third position was taken by Geo Fluids Plc with the sale of 44.1 million units for N89.0 million.
Also, Impresit Bakolori Plc was the most traded stock by value on a year-to-date basis with a turnover of 533.9 million units worth N520.9 million, trailed by FrieslandCampina Wamco Nigeria Plc with the sale of 13.3 million units valued at N513.9 million, and Afriland Properties Plc with 17.6 million units sold for N360.1 million
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