UK development finance institution CDC is to provide $30m to the Investec Africa Credit Opportunities Fund 1 (IACO), which will target debt finance opportunities in sub-Saharan Africa based businesses.
CDC is joining Dutch development bank FMO in supporting the Investec-backed fund, which provides long-term capital to businesses of different sizes and sectors across a wide range of African countries excluding South Africa.
Investec Asset Management is looking to raise up to $350m for the fund from a number of international investors.
This is the first investment made by CDC since the group decided to change its strategy in 2012 whereby it focused on strengthening the African capital markets and boosting the development of the job market and the local private sector.
CDC – which has net assets of £2.6bn – is targeting companies that are looking to grow but have limited access to funding from banks and capital markets both in and outside of Africa.
“There is a shortage of credit in sub-Saharan Africa for private sector businesses,” said investment director of CDC Jeremy Burke. “If African companies are to reach their potential and provide the jobs and economic growth vital to the continent’s future then they need access to world-class capital markets.
“We’re backing Investec’s new fund because we know that they have the expertise, local knowledge and experience to deliver the impact across Africa that CDC is looking for.”
Earlier this year, a long-serving managing director at CDC stepped down from his role as head of the UK development finance institution’s Africa funds team, becoming the fourth senior executive to leave the firm in less than a year.
Copyright © 2013 AltAssets