KfW Entwicklungsbank, together with Allianz Global Investors, has set up a new fund on the behalf of the German Federal Ministry for Economic Cooperation and Development, in order to provide financial resources for African private equity and venture capital funds.
Get stories like this straight to your smartphone with the Born2Invest app. The mobile application collects the latest finance headlines making sure that you’re always up to date, no matter where you are.
The aim of the German based fund, called “AfricaGrow”, is to finance 150 innovative small and medium-sized enterprises (SMEs) and start-ups in reform-oriented African countries through local funds in order to promote sustainable economic and social development. By 2030, the investments are predicted to create more than 25,000 new jobs.
“The structure of the new AfricaGrow Fund is a milestone in supporting Africa’s economy. It is intended to help small and medium-sized enterprises, primarily in reform-oriented African countries, close the existing financing gap and build a solid equity base. In the African economy the small, local companies are the ones that create the most jobs and thus contribute significantly to securing people’s incomes,” said Prof. Dr. Joachim Nagel, Member of the Board of Managing Directors of KfW Bankengruppe.
When designing the fund, emphasis was placed on ensuring that the projects chosen had clear sustainability objectives. Regular and careful monitoring will ensure a measurable positive social and/or economic impact in the form of, for example, income security and the creation of decent jobs in areas such as education, energy and financial services.
The fund volume is the result of cooperation between public and private partners and initially amounted to $188 million (€170 million). $94 million (€85 million) comes from the BMZ, $33 million (€30 million) from the KfW subsidiary DEG and $60,8 to $77 million (€55 to €70 million) from Allianz companies. The Federal Government is providing an additional budget in the tens of millions for accompanying support measures.
For the Allianz Group, the project is an important, innovative component of its Africa strategy. Investments on the African continent are broadly diversified across countries and sectors. So far, Allianz has mainly financed infrastructure projects in emerging markets, including up to $500 million in a co-lending program with the World Bank Group, and around $100 million in Africa.
The fund is managed by Allianz Global Investors. Martin Ewald, the fund manager in charge, has been involved in so-called impact investments for more than ten years, including various rainforest projects.
Andreas Utermann, CEO of Allianz Global Investors, underlines the sustainability aspect of “AfricaGrow”: “I am proud that Martin Ewald and his team were able to bring to life this important and in its way largest project together with our partners in a very short time. Allianz Global Investors is committed to promoting impact investments by mobilizing equity. With AfricaGrow, we are offering an innovative solution that will have a sustainable positive impact on Africa’s social infrastructure on a large scale.”
As a legally independent entity, AfricaGrow is a central instrument of the Compact with Africa (CwA) initiative, which was launched in 2017 under the German G20 Presidency.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in Vestors Capital, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Stocks rise as zombie companies proliferate
Stocks are hitting new highs but the foundation underneath is degrading fast. The insane behavior of markets can be blamed...
Agricultural stock news every investor needs to know
The market has been short in Corn as farmers have been holding. That means that there is very little Corn...
3 tech investment sectors to capitalize on the 5G revolution
It's been clear that the size of the expected revolution that 5G will create is certain to be huge. For...
4 important biotech conferences to attend this year
2020 is full of events, and here are some of the most interesting biotech conferences every professional should consider: Bio€quity...
Crowdfunding rules are changing in Europe
Crowdfunding projects with up to $5.5 million (€5 million) are getting new regulations from the European Crowdfunding Service Providers (ECSP)....
- Crypto7 days ago
21 blockchain startups to compete at the European Blockchain Convention
- Business7 days ago
EssilorLuxottica is building an ambitious vision for 2020
- Africa7 days ago
Côte d’Ivoire and Ghana want to create a cocoa OPEC to support farmers
- Biotech7 days ago
German biotech companies continue to raise capital despite uncertainty