The African Development Bank has approved a € 12.5 (US$14) million equity investment in Adiwale Fund 1, a first-generation private equity fund targeting small and medium-sized enterprises (SMEs). ) with high growth potential in Francophone West Africa.
With a target capitalization of € 75 million (US$84.2 million), the fund will acquire minority stakes in SMEs that are well established in their market, have a competitive advantage and can grow rapidly.
Geographically, the fund will focus on Côte d’Ivoire, Senegal, Burkina Faso and Mali followed by Togo, Benin and Guinea where the economic outlook and its own networks open up opportunities and are poorly served by the global private equity market.
The fund’s average volume of fund transactions will range between € 3 (US$3.4) million and € 8 (US$8.9) million and will focus on three main areas: consumer services (consumer goods and services, education and health, etc.), business services (transport, logistics, IT, Internet and construction) and the sector industrial (pharmaceuticals, agro-industry, chemicals, etc.).
“The Bank’s investment in the Adiwale Fund 1 will improve funding opportunities and support for SME capacity building in Francophone West Africa,” said Alhassane Haidara, head of the Non-Food Industries and Services Division, sovereigns of the African Development Bank.
Launched in 2016, the fund’s management company, Adiwale Partners, is backed by a team of seasoned West African professionals who have accumulated decades of experience in private equity, operational activities, corporate finance and investment, asset development and management in Africa, Europe and the United States.
In terms of development, the Bank’s investment will finance the growth of African SMEs, which will translate into the creation of jobs (direct and indirect, skilled and unskilled, for men and women) and tax revenues. This will also benefit local entrepreneurs who will benefit from business management expertise, while promoting regional integration, as the fund will support companies seeking to expand regionally. Finally, this participation will promote best practices in corporate governance and human capital development. What drives a rise in turnover and economic transformation.
The fund’s investment strategy echoes three of the Bank’s High 5 priorities – Industrializing Africa; Integrate Africa and Improve the quality of life of people in Africa. It also responds to the objectives of inclusive economic growth and productivity enhancement enshrined in the Bank’s Ten Year Strategy 2013-2022.
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