According to an article published on the African Development Bank Group, the Board of Directors of the African Development Bank (AfDB) approved on Friday, October 18 a US $12.5-million equity investment in the Kibo Fund II. This contribution will allow the Fund to provide access to finance and capacity building to an underserved market of outward-looking small and medium enterprises (SMEs) and mid-market African firms, particularly in low-income and fragile states within various sectors in Africa, thereby boosting income generation and job creation.

Based in Mauritius, the Kibo Fund II will be managed by Kibo Capital Partners (KCP), an indigenous Mauritian Fund Manager. Kibo Fund II has targeted capital commitments between US $75 million and $80 million to invest in SMEs and mid-market companies, with annual revenues US $10 million to $40 million.

The investments will be diversified across industries and sectors. Moreover, the Fund will promote regional integration by supporting regionally expanding SMEs.

Kibo II will primarily target the Indian Ocean Region, including Madagascar, Mauritius and The Seychelles; the Eastern Africa Region, covering Kenya, Tanzania, Uganda and Rwanda; and the Southern Africa Region covering Zambia, Malawi, Namibia, Botswana, Mozambique, the Democratic Republic of Congo, Angola and Ethiopia.

The main expected development outcomes of this investment will stem from private sector development through alleviation of the financing constraint faced by SMEs, improved governance and business practices for these companies, thereby further job creation and inclusive growth in the region. Moreover, additional benefits will arise from enhanced regional integration through strengthening of the regional operations of an African fund manager.

Original source: African Development Bank Group