UK’s publicly owned impact investor, CDC Group, has unveiled a string of new partnerships totalling nearly $400 million at the UK-Africa Investment Summit (AIS) in London.
The bulk of the funds will be to provide African banks with greater liquidity to support SMEs, entrepreneurs, and microbusinesses in their regions.
These include: A $100 million trade finance loan with a South African bank, ABSA, to support SMEs in southern Africa.
An MoU to commit $100 million to CIB of Egypt to allow the bank to further support SMEs and microfinance enterprises.
A $75 million trade finance agreement with TDB to support bank lending to SMEs in 32 African countries.
A $10 million debt agreement with Mettle Solar Africa to accelerate the roll-out of solar energy in South Africa and Namibia.
$27.5 million investment in Mediterrania III Fund to support mid-cap businesses in North and West Africa.
$20 million investment in Adiwale I Fund to support SMEs in West Africa with growth capital.
A $20 million investment in Verod Cap Growth III Fund to support SMEs active in high growth sectors in West Africa.
A $20 million investment in Metier Sustainable Capital II Fund, a renewables fund focusing on sub-Saharan Africa.
A $15 million investment in the TL.com TIDE Africa Fund, a sub-Saharan African VC fund that supports businesses that leverage technology and innovation.
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Nick O’Donohoe, chief executive of CDC, commented: “Investors have a real opportunity to embrace the UN’s Sustainable Development Goals – in partnership with African countries and businesses – to fight climate change, create jobs and skills and bring about positive social and environmental change.
“The commitments we have announced today will accelerate the roll-out of solar power and other renewable technologies and support the growth of countless SMEs – the bedrock of any healthy economy – across the continent.”
CDC Group driving FDI
CDC Group is responsible for over 10% of all capital invested through Africa-focused private equity funds.
Despite Africa being home to eight of the world’s 15 fastest-growing economies, the continent receives less than 4% of global foreign direct investment.
CDC Group has pledged to commit a further £2 billion ($3 billion) into African businesses over the next two years, as it looks to double the size of its portfolio on the continent.
Strive Masiyiwa, the founder of pan-African telecoms, media and technology company Econet, also commented: “The role of development finance institutions like CDC is vital in providing much needed long-term patient capital for African entrepreneurs and businesses.
“There is a significant opportunity for UK investors to work with African businesses to create a brighter, sustainable and more prosperous future for the continent.”
O’Donohoe added: “The UK is already the investment partner of choice for many African nations. The investment community here now has a fantastic opportunity to strengthen that position by aiming to make a positive impact to bring about sustainable, long-term economic and social development. That aim does not diminish the financial opportunities that exist for all types of investors. In fact, it enhances them.”