Investment organisation the European Investment Bank (EIB) Global has invested €25-million into pan-African fund Amethis Fund III, which aims to provide private equity growth capital to medium-sized companies on the continent.
Amethis Fund III will target companies supplying goods and services to low- and middle-income populations in Africa. The target sectors include healthcare; business services, such as logistics and IT; manufacturing and distribution, including agribusiness and fast-moving consumer goods; non-banking financial services; and services related to infrastructure and energy.
The fund’s strategy is aligned with EIB Global's investment goals, as well as the European Union’s Global Gateway strategy, by supporting economic development in a diversity of geographies, notably sub-Saharan countries.
The fund will pursue an impact-driven strategy developed by Amethis to address critical issues for the continent’s sustainable development, by focusing on gender equality; sustainable employment, with a particular emphasis on health coverage; and climate considerations.
“The EIB is happy to support Amethis in its effort to invest in small companies in low- and middle-income countries across Africa. We see Africa as a close and important partner to the bank, which has a lot of potential and untapped opportunities.
“However, African enterprises still don’t have enough patient equity capital they need for them to grow, which is what our partnership with funds like Amethis seek to address,” EIB VP Thomas Ostros said on May 30.
He noted that private capital was a powerful driver of economic development in Africa.
“Private equity funds, through investment in local enterprises, are playing a catalytic role by bringing external funding, as well as knowledge and technical expertise, to the companies they invest in,” he added.
“Building on our prior collaborations, [the renewed] strategic support [from the EIB] will allow us to continue helping medium-sized companies deliver better goods and services to the African consumers and to become African champions by promoting their regional integration and sustainable economic growth,” Amethis managing partners Luc Rigouzzo and Laurent Demey said in a joint statement.
The EIB has invested nearly €3-billion in equity funds with a geographic focus in Africa.
In 2023, nearly 60% of the EIB’s fund investments were in Africa. Some of these funds are country-specific, while some have a regional focus.
The EIB’s early investment has had a catalytic effect in attracting other investors to invest in funds owing to the bank’s best market practice in terms of environmental, social and governance (ESG) applied, thereby ensuring a stronger impact at the level of portfolio companies.
Over the past 12 years, Amethis has supported the growth of more than 30 African companies, employing directly more than 40 000 people. These companies contribute to the development of the African economy, while also addressing sustainable development goals for the continent.
Amethis benefits from a strong on-the-ground presence in four African capital cities – Nairobi, Kenya; Abidjan, Côte d’Ivoire; Casablanca, Morocco; and Cairo, Egypt – which helps the fund identify new opportunities and monitor the market’s evolution in each country.
It also allows Amethis to build a reputation and establish relationships to better accompany companies in their new expansion phases, to achieve value creation and impact.