The European Bank for Reconstruction and Development (EBRD) has announced that it will invest up to 40 million dollars in the SPE PEF III fund launched by SPE Capital, aiming to raise $350 million to support the growth and resilience of mid-sized companies in Morocco, Tunisia, and Egypt through equity and equity-related investments, according to EBRD statement on Thursday.
The plan is designed to allocate up to $40 million across eight to 12 high-growth sectors, including manufacturing, business services, healthcare, pharmaceuticals, and private education.
The investment strategy of EBRD aims to bolster financial markets and enhance the competitiveness of businesses in North Africa by preserving private equity as a crucial alternative funding source.
SPE PEF III seeks to generate long-term capital gains through investments in businesses in the three North African countries, with the flexibility to invest in targeted sub-Saharan African countries.
Anne Fossemalle, EBRD Director for Private Equity Funds investment showed excitement with the new partnership with SPE capital. “We are excited to support SPE Capital, a key strategic partner to the EBRD in the southern and eastern Mediterranean region, in their next phase of development, through our investment in PEF III.”
“SPE Capital will leverage their established presence in regional offices in Tunis, Casablanca, Cairo, and Abidjan to support African firms in reaching their full operational potential, deliver successful financial returns to investors, and improve quality of life on the continent,” she added.
The EBRD has emphasized the significance of this investment in bolstering the resilience of financial markets and enhancing the competitiveness of local businesses. By introducing private equity as an alternative source of financing in North Africa, the aim is to diversify capital sources for funding business expansion and to create a stronger economic environment in the region.
SPE Capital, previously active in managing funds in Africa, will utilize this investment to provide support to mid-sized companies in Africa, helping them to endure market downturns and thrive. This decision comes after the EBRD’s earlier investment in SPE Capital’s AIF I fund, which supported nine companies operating in different sectors in Morocco.
“Since 2012, the EBRD has invested more than €19 billion in 356 projects in Egypt, Morocco and Tunisia, across various sectors of these economies,” the press release concluded.