The AfricInvest fund, fourth of the name, has a first closing at 202 million dollars. Among other things, it receives support from the British CDC Fund, the Finnish Finnfund and the French Proparco.
CDC Fund and Finnfund announced on July 6 that they had committed $70 million to AfricInvest Fund IV, the general-purpose pan-African fund aimed at promoting the growth of African companies.
Commonwealth Development Corporation, a British investor and development finance institution, has committed $50 million. This contribution is the most important one-time grant to its partner in Africa. For its part, Inonde, the Finnish financier for development, has invested $20 million.
With offices in cities like Abidjan, Cairo, Casablanca, Lagos, Nairobi and Tunis, AfricInvest has one of the most comprehensive track records in African private equity, having made more than 160 investments in 25 African countries across several funds. The “Fund IV” is based in Tunis.
It will invest in medium to high growth companies in sectors such as financial services, agribusiness, logistics, manufacturing, healthcare and education. Investments by CDC and Finnfund strengthen their long-standing relationships with AfricInvest; they anchor the fund’s first closing at $202 million.
These commitments come “at a particularly difficult time”, recognize the two players. In this context, this boost will allow AfricInvest to invest in promising and growth-oriented companies, creating up to 2,500 jobs on the continent.
The two partners join other development finance institutions like Proparco, as well as the International Finance Corporation, or the United States’ development finance institution, Development Finance Corporation.
Success for 25 years!
The fund, whose total resources are expected at $500 million, targets medium-sized African companies that are well positioned and likely to become regional champions. As a priority, its managers will focus on transactions in the consumer, financial services and education sectors.
For its part, Proparco, through its specific support, intends to support “the development of strong local and regional businesses, oriented towards consumers, throughout Africa”.
AFD’s development subsidiary considers AfricInvest to be “one of the pioneers of private equity in Africa, investing successfully on the continent”. This, for 25 years, through its funds from North Africa and sub-Saharan Africa. A long-standing partner of the group, Proparco is now investing $30 million in the first closing of the AfricInvest IV fund.
The private sector is the main engine of economic growth and poverty reduction in Africa, and SMEs constitute the majority of the African economic fabric. “Their access to capital is crucial, and its scarcity remains the main obstacle to growth”, considers Proparco.
Respecting the SDGs!
In the continuing of the previous funds, the AfricInvest IV fund aims to provide growth capital to medium and large capitalization companies in Africa.
It therefore focuses on consumer-oriented sectors, including financial services, manufacturing, retail and consumer goods, agri-food, health care, education, telecommunications, logistics and distribution.
The fund seeks to develop local businesses that are well positioned to make them regional champions. It will be the first fully Pan-African fund of the group.
This project should contribute to the achievement of several SDGs (Sustainable Development Goals). In particular SDG 8 “Decent work and economic growth” and SDG 9 “Industry, innovation and infrastructure”. It should support the creation of jobs for women.
Finally, AfricInvest is committed to the management of environmental and social risks, as well as environmental, social and governance integration throughout its investment decision-making process. CDC and Finnfund worked in close collaboration with AfricInvest and helped the company to expand its team around these two issues.
Reference: https://www.finnfund.fi/en/news/cdc-group-and-finnfund-commit-us70-million-to-africinvest-fund-iv/
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