Ecobank Transnational Incorporated (ETI), have announced a $250 million Pension Fund investment with the Public Investment Corporation (PIC) of South Africa. The agreement, which is PIC’s investment on behalf of the South African government employment pension fund (GEPF) in ETI’s common equity, was revealed late on Monday, in Arusha, Tanzania.

The agreement witnessed by many African investment stakeholders was part of the sideline activities at the ongoing annual general meeting of the African Development Bank (AfDB).

Chief Executive of ETI Group, Arnold Ekpe signed for Ecobank while Chairman of PIC and Deputy Finance Minister for South Africa, Mr. Nhlanhla Musa Nene and Chief Executive Officer of PIC, Mr. Elias Masilela signed for PIC.

The investment, which is PIC’s first major direct investment in Africa outside South Africa, was in line with GEPF’s investment strategy of identifying Africa as the next frontier for investment growth.

According to reports, the deal is expected to strengthen Ecobank’s tier one capital and further enhance its ability to grow its business across the African continent. Under the terms of the agreement, the $250 million seed fund will amount to 3,125,000 shares in Ecobank or 19.58 percent of the bank’s total outstanding shares.

The investment will also enable PIC to become a board member of ETI.  According to ETI’s Chief Executive, the GEPF transformation as a shareholder of Ecobank will leverage the bank’s reputable local and international shareholders and gradually bring ETI’s equity capital raising programme to an end.

“Our unparalleled presence across sub-Saharan Africa and our knowledge of local markets will also facilitate the GEPF’s investment plan for Africa,” Ekpe said.

PIC’s CEO Elias Masilela also reiterated the investment’s pertinence to the corporation’s growth programme.

Expressing his optimism, he said the PIC is excited about the “proposed investment” it will make in Ecobank, and that the company “strongly believe” that the agreement is a “significant step” towards complementing  the Africa strategy of the company’s  major client, GEPF, which seeks to take advantage of private equity opportunities on the continent.

“With this one investment, we will be immediately optimising our footprint on the rest of the continent, an action that would otherwise require multiple investments and huge effort as well as resource allocation,” he added.

ETI is the parent company of Ecobank Group, a Pan African banking group with presence in 32 countries.