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The Board of Directors of the African Development Bank (AfDB) has approved a €20-million equity investment in the Maghreb Private Equity Fund III (MPEF III). This third-generation multi-sector private equity fund will target investments in Small and Medium Enterprises in Morocco, Algeria, Tunisia, Libya and, according to emerging investment opportunities, Egypt.
MPEF III is a 10-year fund, with a target size of €130 million. It will target 18 middle-market family-owned businesses that are well-established in their local market and have the potential to scale up their activities at the regional level. By investing in companies showing a significant potential to grow, MPEF III will help to create jobs, attract foreign-exchange earnings, generate tax revenue for their respective governments and contribute to regional integration of markets in the Maghreb.
The Fund will invest in a broad variety of sectors with a strong focus on manufacturing for export and companies aiming to expand at a regional or continental level. The pipeline of investments will also include sectors such as IT and telecoms, services, transport and agribusiness and food processing.
MPEF III will focus on businesses in high-growth industries seeking capital, contacts, and know-how to facilitate expansion into the Maghreb regional markets as well as overseas. The Fund’s activities will create cross-border jobs and employment opportunities triggered by the multiplier effect of direct investments, co-financing and parallel investments from the fund and its DFI investors.
Following an investment in MPEF II approved by the AfDB in January 2008, MPEF III is the Bank’s second private equity investment dedicated to the Maghreb region. MPEF III is sponsored by Tuninvest Finance Group (TFG), a leading private equity house in the region with a strong track record, expertise and presence across the Maghreb. TFG currently manages nine private equity funds.
The AfDB Group’s mission is to help reduce poverty, improve living conditions for Africans and mobilize resources for the continent’s economic and social development. With this objective in mind, the institution aims at assisting African countries – individually and collectively - in their efforts to achieve sustainable economic development and social progress. Combating poverty is at the heart of the continent’s efforts to attain sustainable economic growth. To this end, the Bank seeks to stimulate and mobilize internal and external resources to promote investments as well as provide its regional member countries with technical and financial assistance.
The Industry and Services division of the Bank’s Private sector department aims at investing in private equity funds involved in a variety of sectors including agriculture, mining, manufacturing, health, education to attract private sector investments in Africa. In the past three years, the Private sector department has approved 27 equity funds for an amount in excess of US$ 400 million in infrastructure, health as well as in generalist funds. The AfDB group seeks sustained continued growth of its member countries through better infrastructure, stronger private sector, more robust institutions and greater economic integration.