AFRICA – The Fund for Export Development in Africa, FEDA, the impact investment arm of the African Export-Import Bank, Afreximbank, set up to support intra-African trade growth, value-add export development and industrialization, has announced its first close of US$670 million across its four fund strategies.
Of the US$670 million raised, US$270 million is earmarked for FEDA Direct Equity Fund I, which will provide equity and quasi-equity financing to businesses aligned with FEDA’s mandate.
US$250 million is allocated to the Strategic Initiatives Fund, a proprietary fund established by Afreximbank to implement landmark and high-impact greenfield investments in sectors critical to the growth of intra-African trade and value-added export development across the African Continent.
The third strategy involves the implementation of a private credit fund, Africa Credit Opportunities Fund, L.P. (“ACOF”), jointly sponsored by FEDA and Gateway Partners Group with US$125 million committed. ACOF will invest in credit instruments to support trade enablement and growth in Africa.
FEDA’s fourth strategy involves a US$25 million Venture Fund to provide equity, quasi-equity and venture debt financing to high-impact early-stage ventures across Africa.
FEDA Investment Manager targets to raise a total of US$1.3 billion across the four fund strategies by 2024, with the support of like-minded Limited Partners.
“We are very pleased with this first close which is a first step in the financing of the equity gap in the trade sector in Africa,” Prof. Benedict Oramah, President and Chairman of Afreximbank, said.
“FEDA fund strategies will also facilitate and increase foreign direct investment in the trade and export sectors by attracting leading institutions with a keen interest in Africa’s development.”
FEDA has also been selected as the Fund Manager of the African Continental Free Trade Area (AfCFTA) Adjustment Fund. This Fund is a collaboration between the AfCFTA Secretariat and Afreximbank that is expected to be operational by the first quarter of 2023.
The AfCFTA fund will provide capital to the public and the private sector to facilitate the implementation of the African Continental Free Trade Agreement.
Since 2021, FEDA closed four investments across several sectors. These deals include investments in a leading player in the fibre optic networks industry; a trade-enabling infrastructure project to facilitate gas supply in the West African region; a technology-enabled logistics service provider facilitating the efficient movement of goods across East and West Africa; and one of the leading players in the fast-moving consumer goods industry in Mauritania.
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