CDC commits $15m to West and Central Africa fund

The UK government-backed fund of funds has invested in Advanced Finance Investment Group’s maiden fund, which will hold a second close this year on its way to $150m.

CDC has committed $15 million to West and Central Africa-focused Atlantic Coast Regional Fund.

The vehicle is the maiden fund of Dakar-headquartered Advanced Finance Investment Group (AFIG) and has a target of $150 million. It held its first close on $72 million, which included the CDC commitment, in July 2008 and will hold a second close later this year, Patrice Backer, director and COO of AFIG, told PEO.

Atlantic Coast Regional Fund will make expansion and growth capital investments in the $3 million to $15 million range in Nigeria, Senegal, Côte d’Ivoire, Ghana, Cameroon, Gabon, DRC and Angola. It is currently finalising its first investment, said Backer.

Sector-wise, the fund will focus on transportation and logistics, agribusiness, financial institutions, telecommunications, mining and natural resources and manufacturing companies.

“Mid-market companies in Africa are still struggling to raise external finance. Local banks are often under-capitalised and under-skilled and funding from foreign banks and capital markets is largely unavailable. By targeting companies in need of growth and expansion capital, this fund will help to address this shortage,” Richard Laing, CDC’s chief executive, said in a statement. 

CDC stepped up its investment in Africa following a UK government revision of its investment remit late last year and is now the largest single private equity investor in the region.

The new guidelines from the Department for International Development require at least half of CDC’s investments to be directed to Sub-Saharan Africa, whereas previously this portion of its capital would be divided between Sub-Saharan Africa and South Asia. Emerging markets-focused CDC invests around $1 billion every year.

AFIG was established in 2005 by its Papa Madiaw Ndiaye, a former director of private equity group EMP Africa.