AfDB Approves USD 25 Million Equity Investment to Support Summit Development Group Fund
Tunis, 28 September 2010 - The African Development Bank (AfDB) Group Board of Directors on Wednesday 27 September 2010, approved a USD 25 million equity investment to support the Summit Development Group Fund.
Summit Development Group Fund (SDG) is a 10-year first generation private equity fund registered in Botswana. It is seeking to raise USD 125 million in capital commitments to make equity investments in financial institutions with growth potential in Sub-Saharan Africa and a focus on lending to SMEs, the un-banked and the under-banked.
SDG will be managed by capable fund managers well qualified and experienced in private equity, having successfully managed financial institutions in Africa. Its commercial approach renders its model and delivery approach sustainable, replicable and attractive to other commercial players and more likely to have a strong demonstrative impact on the market.
The project has tremendous economic potential benefits in employment creation, poverty alleviation and government tax revenue enhancement among other benefits. The Bank’s involvement in the Fund will help to deepen the financial sector as well as bring much-needed long-term capital to SMEs, a significant sector of Africa’s economies and the unbanked. It will also help to improve Sub-Saharan Africa’s economic development.
The Bank has good and relevant experience derived from years of collaboration with institutions such as K-Rep Bank, EADB, Shelter Afrique and Ecobank. By be4ing on the Fund’s Advisory Board, the AfDB is well-placed to share best practices and lessons learnt from its investments.
The project is in line with AfDB’s strategy to promote private sector development and it involves potential developmental partnership with other development finance institutions aimed at transforming African financial institutions into strong commercially viable entities that will stimulate private sector development.