IPAE III HIGH IMPACT FOR AFRICA FUND

Promoter – Financial Intermediary

I ET P

Location

• Regional - Africa

Description

The proposed operation consists of a commitment to IPAE III High Impact For Africa Fund, a €70m target impact fund focusing on entrepreneurship in fragile and least developed countries in sub-Saharan Africa, with a focus on West Africa (incl. Burkina Faso, Mali, and Niger) and Madagascar.

Objectives

The aim is to provide equity and quasi-equity to high-growth small and medium-sized enterprises (SMEs) in sub-Saharan Africa frontier markets where barely no other private equity fund invests. This operation will contribute to private sector development in economies lacking growth capital to support local African SMEs. This operation would fit into the Team Europe Initiative ("TEI") Invest in Young Businesses in Africa ("IYBA") as many of the IPAE III's portfolio companies will be young ventures or growing SMEs in fragile African countries. In addition, this operation is aligned with the EU-Africa Global Gateway Investment Package, and several Global Gateway investment priorities and will support a number of sustainable development goals including SDG-1 (No Poverty), SDG -2 (Zero Hunger), SDG-5 (Gender Equality), SDG-8 (Decent Work and Economic Growth), SDG-10 (Reduced Inequalities), SDG-12 (Responsible consumption and production), and SDG-17 (Partnership for the Goals). The fund not only aims at generating financial return but also at creating impact. Indeed, the Fund is expected to generate 4,000 direct jobs with additional ones to be created at the level of portfolio companies' suppliers. Historically the fund manager supported through the two predecessor funds (IPAE I and IPAE II) 8,497 direct jobs (70% employment growth) impacting nearly 52,000 household members and many more through suppliers of portfolio companies while supporting female entrepreneurs and consumers through adhering to the 2X Challenge.

Comments

The fund manager is one of the few ones active on this segment of the private equity market in these frontier markets with small ticket sizes ranging €1m to €5m to support the growth of SMEs in Africa.

Sector(s)

• Services - Financial and insurance activities

Proposed EIB finance (Approximate amount)

EUR 15 million

Total cost (Approximate amount)

EUR 70 million

Environmental aspects

For the environmental and social aspects, investee companies will be requested to comply with the EIB's guidelines, as well as with applicable national and EU legislation, as appropriate.

Procurement

The fund will be requested to comply with the EIB's guidelines, as well as with applicable national and EU legislation, as appropriate.

Status

Under appraisal - 3/04/2024