AfricInvest is seeking profitable investments among Africa's SME companies
02/03/2005
The amount of investment funds seeking out commercially profitable investment targets in Africa is continuously growing. AfricInvest which began its operations in the beginning of September 2004 is a good example of a new type of financing approach which targets small and middle-sized companies.
The amount of investment funds seeking out commercially profitable investment targets in Africa is continuously growing. AfricInvest which began its operations in the beginning of September 2004 is a good example of a new type of financing approach which targets small and middle-sized companies.
The possibilities for unlisted SME companies of securing
long-term funding for business development in Africa are very limited in comparison to the large size companies. Nonetheless, the SME sector’s role in creating jobs and in developing the economy of the entire continent is significant.
“The AfricInvest fund partially covers the funding shortage by providing equity term risk financing for SME companies in Africa” says Finnfund’s investment manager Thomas Schmidt.
According to Schmidt the uniqueness of AfricInvest is that it’s by large an African concept. Tuninvest acts as the fund manager in cooperation with local partners in Morocco, Ghana, Togo, Nigeria and Cameroon.
The target size of the fund is EUR 50 million
The target size of the fund is approximately EUR 50 million of which roughly a half was committed by the end of December. Finnfund has invested EUR 3 million in AfricInvest. The Dutch development finance company FMO’s share of the financing is EUR 9 million, Belgium BIO’s EUR 5 million and the European Investment Bank’s EUR 4 million.
Participants from Africa are the Bank of Africa Group with a EUR 2 million stake and the Nigerian commercial bank IBTC (Investment Banking & Trust Company Limited) with a EUR 2 million stake.
The first investment target in Morocco
AfricInvest targets investment opportunities mainly in the Northern and Western countries of Africa. The investment fund made its first investment in Morocco where it invested EUR 1,4 million in a company called Finapack which produces packaging materials.
Finapack has two production facilities producing cardboard in Casablanca and Agadir. The output is mostly sold in Morocco’s agricultural sector. With the provided additional financing Finapack intends to modernize its production facilities and products so that the packaging materials would serve the local fruit and vegetable growers even better.
Finapack strives to develop its products so that, among others, they would meet the standards set out by the European Union for packaging materials. The EU countries are a growing export market for Morocco’s agricultural producers.
A number of investment decisions are underway
AfricInvest has also made the decision to invest EUR 700.000 in Siprof which is a Moroccan company manufacturing components for trucks. Hakim Khelifa representing AfricInvest says that new investment decisions are to be completed during the next few weeks. Six new opportunities were under consideration by the end of December.
AfricInvest seeks profitable investment targets especially in rapidly growing industries such as the financial sector, the food industry, the transport sector and telecommunications industry.
For more information please contact Mr Thomas Schmidt tel. +358 9 3484 3327 /
firstname.lastname@finnfund.fi
