President Hoyer visited Sharm El Sheikh during the weekend where he met with the Egyptian President Abdel Fattah El Sisi, the Prime Minister of Egypt, Dr. Moustafa Madbouly and the Minister of Investment and International Cooperation, Dr. Sahar Nasr. He discussed current challenges and priorities for the country, as well as further loans to be provided under the External Lending Mandate (ELM) and the Economic Resilience Initiative (ERI).
The visit comes on the occasion of the Business for Africa Forum 2018 organised in Sharm El-Sheikh. The President participated in the leaders’ panel, which gathered presidents of Togo, Zimbabwe, Niger and Rwanda and representatives of African countries. The President conveyed a strong message of support to the African continent: “The Bank will continue to support a shift from aid to investment, from poverty to prosperity in the continent”.
During the visit, two loans were signed:
Innovative financing for innovative start-ups
During his visit to Egypt, the President signed the EIB’s first operation under the Economic Resilience Initiative Risk Capital Facility (ERI RCF) targeting the Southern Neighbourhood countries. The EIB has made a commitment of USD 11.25 million to Sawari Ventures Fund, a venture capital fund that will invest in growth and seed stage innovative businesses in Egypt, Morocco and Tunisia.
This is one of the first EIB’s commitments in a fund supporting innovative start-ups in the three countries. “Most venture capital investors did not know nor have confidence in markets such as Egypt, but we believed in it when we appraised the project. We saw young, smart and motivated engineers working within a vibrant entrepreneurial eco-system with a need of risk capital in order to achieve their potential,” said Felix Knidlberger, EIB investment officer.
The EIB is a cornerstone investor in the fund which will invest in emerging tech companies and also in seed stage companies through a local seed-accelerator, Flat6Labs, providing internationally-recognised coaching and capital allowing knowledge transfer and support to innovative entrepreneurs at seed stage.
The fund aims to generate financial returns to investors, coupled with a significant developmental impact, given:
- its focus on young businesses providing innovative products and solutions
- its potential to create quality jobs especially for younger generations
- its financial and technical support to innovative businesses
Technology and innovation, drivers for progress
Technology and innovation can play a significant role in accelerating living standards and social progress in the MENA region, where the fast-growing digital economy is still underdeveloped despite first successes and many talented young entrepreneurs. The lack of finance is often the single major impediment to starting and/or developing a business.
Developing a fund supporting innovative start-ups in new markets such as Egypt has been challenging but the successful closing of the fund after almost two years from the start of the operation is a proof of the ability of the EIB to engage in innovative operations in the region.
The EIB commitment has also contributed to crowd-in additional capital from local, Egyptian financial and public investors through the creation of an Egypt-based co-investment vehicle, which will invest alongside the fund.
The EIB has been able to invest in the Fund thanks to the recently established ERI Risk Capital Facility, which is a core component of the Impact Finance Envelope of the Economic Resilience Initiative (ERI). The ERI has been developed in response to a request by the European Council to mobilise additional financing in support of sustainable growth and social cohesion in the Southern Neighbourhood and Western Balkan regions.