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.
- 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.
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.”