The African Development Bank‘s (AFDB) Board of Directors has approved a $10.66 million equity investment to encourage venture capital investments in African entrepreneurs at all phases of their development.
Of the $10.66 Million, the AFDB will provide $7.62 million to the equity fund from its own resources, while the European Union (EU) will contribute $3.05 million in collaboration with the Organization of African, California, and Pacific States (OACPS).
The money will be used to help Cathay-AfricInvest Innovation Fund meet its goal of raising $119.7 million to invest in over 20 early-stage enterprises in Sub-Saharan Africa.
The Innovation Fund focuses on financial inclusion, logistics, and retail systems for mobile and online users, pay-as-you-go, healthcare advances, and off-grid energy solutions.
The Innovation Fund has recently broadened its scope to include start-ups that are capitalizing on the new digital opportunities created by the Covid-19 outbreak, or that have a great potential to help battle the coronavirus.
AfricInvest Capital Partners and Cathay Innovation SAS are co-sponsors of the Mauritius-based Fund.
“The Bank’s clearance signals another key step forward in the integration of the Boost Africa Program and its partnership with the EU, OACPS, and the European Investment Bank.
“It illustrates the importance given to Africa’s tech-enabled rising entrepreneurs, as well as the significant role played by AfricInvest and Cathay Innovation in aiding this important business segment in attaining Africa’s growth, reform, and integration aspirations,” said AfDB Director for Financial Sector Development Stefan Nalletamby.
Over 40% of the initiatives in its current pipeline span multiple African regions. West Africa accounts for a third of the start-ups in which it invests. One-quarter of all shareholder start-ups are in the healthcare industry.
AfricaGrow of Germany’s KfW/Allianz GI, Swiss impact investor Obviam as well as France’s public investment bank BPI and development financing organization Proparco, as well as are among the other investors.
The Bank’s help is expected to hasten the emergence of a new generation of accomplished African entrepreneurs who will serve as role models for younger innovators.
It will also assist young and female-led start-ups, as well as extend access to financial and “real sector” goods and services, using appropriate technology and innovation.
Recall, on March 25, News Central reported that the AFDB approved funding of $88.2 million for the Mano River Union’s third phase of the Road Development and Transport Facilitation Programme.
The Mano River Union is an international organisation founded in 1973 by Liberia and Sierra Leone following the signing of the Mano River Declaration.