Proparco commits US$30mn into Africinvest Fund IV

25 Jun 2020

Through a US$30mn investment in the first close of AfricInvest’s new multisector private equity fund, Proparco will support the development of strong local and regional consumer-driven businesses across Africa.

AfricInvest is one of the pioneers of private equity in Africa, successfully investing on the continent through their North African and sub-Saharan Africa funds for over 25 years. As a longstanding partner of the group, Proparco has invested in 15 of the manager’s 19 funds since 1997, and has now invested US$30mn in the first close of AfricInvest IV, alongside other DFIs, reputable African Pension Funds and one reinsurance company.

The private sector represents Africa’s main engine of growth and poverty reduction, and small and medium-sized enterprises make up the majority of the African economic fabric. Their access to capital is crucial, and its scarcity remains the primary hindrance to growth. Following on from predecessor funds, AfricInvest Fund IV aims to provide growth capital to mid and large cap businesses in Africa, with a focus on consumer-oriented sectors, including financial services, manufacturing, retail and consumer goods, agribusiness, healthcare, education, telecoms, logistics and distribution. The fund seeks to develop well-positioned local businesses into regional champions and will be the first completely pan-African fund of the group.

A project supporting local employment and good ESG practices

This project will contribute to achieving a number of the United Nation’s Sustainable Development Goals (SDGs), including number eight, which is focused on “decent work and economic growth” and number nine, which targets investments in “industry, innovation and infrastructure”. It should support job creation, including women’s employment, mostly in investee companies. Proparco will support AfricInvest and the portfolio companies in improving environmental, social and governance standards, management practices and assessing developmental impact.

As part of the French initiative Choose Africa, this investment is in line with Proparco’s strategy on the African continent, where companies have difficulties in accessing long-term financing, and supports the emergence and growth of SMEs in sectors favored by the AFD Group, such as higher education or healthcare.

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