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North African SMEs get boost from AfricInvest

North African SMEs get boost from AfricInvest The close of an AfricInvest fund in late 2018 will provide up to EUR 194 million in funding for small and...

The close of an AfricInvest fund in late 2018 will provide up to EUR 194 million in funding for small and medium-sized enterprises across Algeria, Egypt, Morocco and Tunisia.

Africa-focused private equity investor AfricInvest has closed a EUR 194 million fund aimed at investing in small and medium-sized enterprises (SMEs) in North Africa.

Featuring contributions worth EUR 20 million from the African Development Bank (AfDB), the Maghreb Private Equity IV has already been backed by a wide range of development finance institutions and banks.

National development finance organisations involved include the United Kingdom’s CDC Group, which last year committed to invest 25 million in SMEs in Nigeria, Netherlands Development Finance Company (FMO), Germany’s Deutsche Investitions- und Entwicklungsgesellschaft (DEG), Belgian Investment Company for Developing Countries (BIO), Swiss Investment Fund for Emerging Markets (SIFEM), Development Bank of Austria (OeEB), Denmark’s Investment Fund for Developing Countries (IFU) and France’s PROPARCO.

Also involved are the European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB) and the World Bank’s International Finance Corporation (IFC).

Maghreb Private Equity IV is a 10-year fund which will take what AfricInvest called “substantial minority stakes” in business across the region, particularly in Algeria, Egypt, Morocco and Tunisia, targeting well-established local companies which are seeking to start doing business on a regional level in the Mediterranean and Africa.

In a statement, AfricInvest founding partner Ziad Oueslati said the close of the fund was “a powerful affirmation” of support from the fund and its partners “for the North Africa region and their belief that North African companies can create significant value across and beyond the region”.

Abdu Mukhtar, director of industrial and trade development at AfDB, said the fund “is a vehicle perfectly aligned with our strategic goals to strengthen the capabilities of ambitious midsize companies in North Africa to expand into new markets in sub-Saharan Africa”.

AfricInvest recently invested USD 51 million in outsourcing and customer service company iSON Xperiences, which operates in five countries in sub-Saharan Africa, as well as India. It also put EUR 12.2 million into Ivorian transportation and supply chain company Les Centaures Routiers (LCR).

Proparco and FMO recently combined to provide funding to an Ivory Coast agricultural company, while IFC is supporting a wind energy platform across Africa. The Dutch institution’s investments also include South African financial technology (fintech) company Yoco, while its French counterpart has invested in a Senegalese solar plant and supported a USD 50 million loan facilitation programme for Ecobank.

In 2016, AfricInvest sold a 40% stake in an Algerian packaging company to DEG and a group of UK private equity funds, while the German institution also invested in a Nigerian biscuit manufacturer.

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