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Impact Investing

Impact investing activities in Africa from Jan to May 2020

The global economy has been seriously bashed by the rampaging coronavirus pandemic or covid 19 which has forced so many economies into lockdown. Notwithstanding, Africa, from January 2020 to May 2020, recorded a number of impact investing activities as reported by the African Private Equity and Venture Capital Association (AVCA). The summary of some of the impact investing activities, compiled by BRIU, is presented hereunder:

Swedfund supports healthcare actors in Nigeria, Madagascar and others

Swedfund is the Development Finance Institution of the Swedish state. Its mission is to combat poverty by investing in and develop sustainable business in the world’s most challenging markets. Considering the pressure on the healthcare facilities in developing countries as a result of the outbreak of the covid 19 pandemic. In May 2020, Swedfund supported different actors in the healthcare sector in Nigeria, Madagascar and India with the sum of SEK2.2 million. The support included personal protective equipment, medicines, and transport. The major aim of this move was to prevent the spread of coronavirus and to support emergency preparedness. The focus, according to Swedfund, was to increase health and safety of healthcare workers.

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The beneficiaries are Express Pharma in Nigeria; Opham in Madagascar, and Medica Synergie in East India. Express Pharma is a chain of pharmacies that is delivering safe medicines across Lagos, Nigeria’s commercial nerve centre.  Opham is a pharmaceutical products wholesaler that provides specialty and generic products to pharmacies and hospitals in Madagascar. Medica Synergie treats about 485,000 patients every year, according to AVCA. In addition, it manages eight hospitals and the company targets providing high quality and affordable healthcare services to the underserved parts of East Indian market.

Apart from the above, Swedfund equally supported Platcorp, which is a financial institution providing credit to private individuals and small medium sized firms in Kenya, Tanzania and Uganda, with €5 million.

”It is urgent for us as a Development Finance Institution to strengthen the financial resilience of companies and protect jobs in developing countries .The Platcorp Group has a broad and efficient platform for providing access to financing for small and medium-sized companies in East Africa, which makes it possible for us to reach and support several companies which is in line with our mission”,  AVCA reported Maria Håkansson, CEO Swedfund, to have said.

Alitheia IDF gets $10m from SEDF

Soros Economic Development Fund (SEDF), the impact investing arm of the Open Society Economic Justice Program, has committed $15 million to Alitheia IDF and Women’s Wolrd banking Capital Partners II. The former got $10 million while the latter got $5 million. The fund is meant to advance economic and gender equity in Africa.

According to AVCA, Alitheia IDF will invest between $1 and $5 million into SMEs that promote gender equality in southern and western African region on the continent. Women’s World Banking Capital partners II is expected to invest between $5 and $10 million in financial services companies in emerging markets, with focus on areas where many women still lack access to formal financial products and services.

“These investments are coming at a particularly crucial time, as African women—who are a part of the informal economy—are at a heightened risk of economic precarity as a result of the coronavirus pandemic,” said Sarah Hewitt, a program officer with the Open Society Economic Justice Program. “SEDF is also ramping up investment work to directly respond to COVID-19 and has also helped seed an impact investment coordination platform hosted by the Global Impact Investment Network”, AVCA reported.

Proparco commits $20m into SPE AIF I Fund

Proparco, an impact investing firm which plays advisory role on environmental and social aspects, supported SMEs in North Africa with $20 million equity investment in the SPE AIF I investment fund. The beneficiary SMEs must be undergoing periods of strong growth or transition in the industrial, health and education sectors in Egypt, Morocco and Tunisia.

SPE AIF I, a private equity fund, is managed by SPE Capital, Proparco’s long standing partner. It focuses on North Africa especially Egypt, Morocco and Tunisia.

“It will support around ten companies through equity investments giving control or strong influence, in the industrial, health and education sectors, and should help to support more than 3,000 indirect jobs including 700 women’s jobs. It will also contribute to capacity building, through the training of a total of 600 employees as a result of training expenditure by the investee companies”, AVCA stated.

ETC Group Kenya gets $40m from DEG

ETC Group, a Kenyan agricultural commodity trader and supply chain manager, has received $40 million investment from DEG. ETC Group is a large and diversified agricultural commodity trader and supply chain manager in Africa. Established in 1967 in Kenya, the firm has emerged as one of the largest independent agricultural commodity supply chain managers in Africa. ETC Group manages more than 460 warehouses and operates over 120 processing plants in Africa.

ETG Group is also one of the largest importers and distributors of fertilizer in Africa which plays an important role in enhancing incomes of African farmers. The DEG facility will allow ETG stabilize and grow its business, according to AVCA.

ARCH EM Partners invests $16.5m in CrossBoundary Energy

ARCH Emerging Markets Partners’ Africa Renewable Power Fund (ARCH ARPF), in the first quarter of this year, announced the investment of $16.5 million in CrossBoundary Energy (CBE). The fund, according to report, particularly for its commercial and industrial solar services and was the first stage of larger transaction to scale solar for businesses across Africa. The project is meant to provide businesses across Africa with access to cheaper and cleaner power.

CBE is reputed to have powered the solar-as-a-service business model in Africa. The firm, in partnership with local developers and solar contractors, finances, installs and operates solar assets that provide cleaner and cheaper power.

CBE has is footprint in Kenya, Rwanda, Ghana, and Africa’s biggest economy, Nigeria. In those aforementioned economies, CBE’s clients include Unilever, Diageo, Heineken, Actis and other notable companies in those countries.

CDC commits $39.2 million to SMEs in West Africa

West Africa’s small and medium enterprises are in for a good time following the announcement of $39.2 million by CDC Group to support small businesses in the West African sub region. Specifically, CDC will be backing Verod Fund III and Adiwale Fund I, both of which are based in the West African sub region and are known to be support SMEs with $19.2 million and $20 million respectively.

Adiwale Fund I invests in SMEs with the markets of interest in Cote d’Ivoire, Senegal, Burkina Faso and Mali. Its target sectors are FCMG, business services and manufacturing. Verod Fund III is the second fund raised by Verod Capital which targets SMEs in the West African sub region. The Verod Fund III will be targeting SMEs in Nigeria and Ghana especially in consumer goods and services, agribusiness and financial services.

“In West Africa, SMEs should be the engine room of regional economies but they are being held back by the lack of access to finance. As the largest private equity investor in Africa, CDC is committed to boosting access to finance for these businesses. Investing in SMEs enables our capital to go further and we expect that positive returns will generate an important demonstration effect and help mobilise further capital into these markets, encouraging more commitments towards the United Nations Sustainable Development Goals”, AVCA reported Nick O’ Donohoe, CEO of CDC Group to have said.

 

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