Wealth Fund With Climate Focus in Its DNA Looks Beyond Gabon
Gabon’s sovereign wealth fund plans to make further investments abroad to diversify its portfolio and boost returns.
The fund, established in 2012 to invest surplus revenue in OPEC’s second-smallest member, currently has $1.89 billion under management. About four-fifths of that amount is invested in Gabonese infrastructure, land development and other projects, with the remainder in Nigeria, Ivory Coast and Togo.
After focusing on domestic investments over the past three years, the fund is looking abroad to diversify its portfolio, Chief Executive Officer Akim Daouda, 39, said in an interview in the capital, Libreville.
“This is something we’ll be looking at starting at the end of 2022, once we have already closed all our investments into infrastructure,” he said. He didn’t provide further details on which markets its considering.
The fund is diversifying as Gabon, a central African nation of 2.2 million people, pivots away from its reliance on oil and places forestry at the center of government efforts to secure different revenue streams. In June, Gabon became the first country on the continent to receive payment for reducing emissions by protecting its forests.
On Wednesday, the fund announced a 77 billion CFA franc ($138 million) concession agreement with the state-run Gabon Power Co. and a unit of Finland’s Wartsila OYJ Abp to build a 120-megawatt gas-fired power plant in the northwest of Gabon.
In all of the investments the fund has made, “you have a DNA, a red line that you will see, which is sustainable development and the battle against climate change,” said Daouda.
The fund also plans to seek a credit rating next year, as part of an effort to improve governance and transparency.
Diversifying its investments and obtaining the rating are “key to our strategy to being able to raise more funds to support the country’s ambition towards economic transformation,” he said.
Fitch Ratings last month upgraded Gabon to B-, from CCC, with a stable outlook. The company cited higher oil prices and a new International Monetary Fund program for the upgrade.
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