2023 was a turbulent year for the financial sector as rising interest rates and inflation slowed economic growth and affected the affordability of funding. Coupled with violent conflicts in many parts of the world, biodiversity loss and climate change, this has presented serious challenges to global peace and prosperity. Whether as a direct consequence or not, many investors have pulled back on their climate and biodiversity goals, and some industry participants are increasingly unable to commit to the highest ESG practices.

From an African perspective, elevated sovereign debt levels and costs, constrained access to external financing and rising borrowing costs are all expected to negatively affect local markets in 2024 and beyond. While this challenging environment has led to a slowdown in Africa's growth, the economic outlook moving forward is more positive. Africa is the most rapidly urbanising continent in the world, creating many challenges alongside tremendous investment opportunities. Similarly, while growth for Pacific Island countries is still slow compared to pre-pandemic levels and some capital markets have yet to revert to non-pandemic conditions, we expect a rebound due to anticipated improvements in global economic conditions.

Investments in critical sectors like energy and agriculture, along with efforts to enhance the resilience of infrastructure and food and agricultural value chains, will be vital for maintaining economic growth. The scale of resources needed to support the transformation of African and Pacific Island countries requires innovative, inclusive and responsive mobilisation of funding on affordable terms. While this transformation will not happen overnight, we are cautiously optimistic that significant progress will be made in the years ahead.

Africa is home to some of the best solar resources globally, presenting significant opportunities for renewable energy development. Meanwhile, a number of Pacific Island countries have set ambitious targets to achieve 100% renewable energy by 2030. Looking ahead, local energy developers and companies in both regions are poised to play a crucial role in reducing energy imports, creating jobs and stimulating local economies. These efforts will not only enhance energy independence but also drive sustainable economic growth and support global climate goals. We believe that local energy developers will be instrumental in this transformation, supporting innovation and resilience in the energy sector.

From a company perspective, we see growth opportunities for Camco and Camco-managed funds that foster this domestic economic development and which are aligned with the SDGs and the Paris Agreement. Realising those opportunities will not be without hard work and commitment, but we are confident that we have the right team, investment approach and expertise to make it a reality.