The former head of the ECX is striking out on her own to set up commodity exchanges. She says that the success of the Ethiopian case has caught the attention of investors.
Back in 2008, when Eleni Gabre-Madhin set up the Ethiopia Commodity Exchange (ECX), it was almost impossible to raise private- sector financing for an African agriculture exchange, she says.
“There really was no choice but to go to public-sector institutions.” Which is what the ECX did, raising $24m of development finance from the World Bank, the United Nations Development Programme and the Canadian International Development Agency.
Five years later, the environment is “completely different”, says Gabre-Madhin, who left the ECX in late 2012 and raised $5m of mainly private seed capital to start a new business that would design, build and invest in commodity exchanges in frontier markets.
Investment bank Morgan Stanley is the anchor investor in the eponymous eleni LLC, alongside the International Finance Corporation. She anticipates investment from Bob Geldof’s private equity firm, 8 Miles.
The plan will be to raise between $10m and $20m for individual projects in Africa and beyond, using a private-public partnership model, with eleni LLC taking equity investments in each exchange.
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