AfDB Increases its Capital in Atlantic Coast Regional Fund to Support Local Private Sector Growth in Africa
The Board of Directors of the African Development Bank (AfDB) approved on Wednesday, October 30, 2013 an additional US $10 million equity investment in Atlantic Coast Regional Fund (ACRF), a 10-year US $72 million generalist private equity fund whose area of focus includes fragile states and low-income countries in Western and Central Africa. Through this targeting of growth and expansion oriented opportunities in the region; supporting indigenous entrepreneurs and converting promising local enterprises into regional players, ACRF is contributing to the development of the region’s private sector. AfDB’s financial contribution will therefore enable ACRF to scale up its operations and thus its contribution to poverty reduction, economic growth, capital markets development and regional integration.
ACRF is managed by the Advanced Finance and Investment Group (“AFIG Funds”), a Mauritius-registered limited liability company headquartered in Dakar. AFIG’s investment team has over 40 years of combined experience in Africa. With this additional investment, AfDB is participating in the recapitalization of ACRF, and supplementing its earlier investment of US $15 million in 2007. This additional investment is informed by the Fund’s implementation progress and performance to date. As of September 2013, ACRF had made seven investments in six countries and the Fund manager had generated a strong deals pipeline of up to US $140 million.
The additional investment will increase development impact and economic benefits through the creation of new jobs in downstream commercial infrastructure and expansion projects sector. The Fund has to date contributed to sustain 1,821 jobs of which 508 are held by women and also helped create 86 new ones. The recapitalization is expected to result in creation of an estimated over 2,000 additional jobs and help to leverage additional investments in target companies. ACRF’s new investments will augment revenues to governments in the targeted region, and facilitate technology transfer and development of local entrepreneurship. The investments are also expected to contribute to infrastructure development and regional integration.
The proposed investment is aligned with the AfDB’s Private Sector Operations Strategy to support entrepreneurship, thereby contributing to job creation and increased exports. AfDB’s participation in recapitalization will reassure other participating DFIs and provide comfort to minority African investors of the Fund. The capital increase will enhance the Fund managers’ involvement in community development and business promotion activities in the region.