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ETHOS MEZZANINE PARTNERS III: An equity investment to support SMEs in East and Southern Africa
Project
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Signature date
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Location
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South Africa, Botswana, Burundi, Ethiopia, Kenya, Lesotho, Malawi, Mozambique, Namibia, Uganda, Rwanda, Tanzania, Zambia, Multi-country Africa
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Financing tool
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Financing details
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USD 10,000,000 equity investment (+ USD 5,000000 subject to conditions at the final closing)
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Customer
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ETHOS MEZZANINE PARTNERS 3
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Type of customer
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Investment fund
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Country of headquarters
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South Africa
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Project number
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PZZ1341
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Environmental and social ranking
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IF-B
This information is given at the time of signature, without prejudice to any developments in the operation/project.
Ethos Mezzanine Partners 3 is one of the very first mezzanine funds in Sub-Saharan Africa. It provides SMEs and midcaps in East and Southern Africa with access to long-term financing and helps them improve their environmental, social and governance practices. Through this equity investment, PROPARCO is supporting the development of sustainable companies and the diversification of capital markets on the continent.
Client presentation
Ethos Mezzanine Partners 3 is a mezzanine fund focused on East and Southern Africa. The manager, Ethos Mezzanine Partners, came about through the integration in June 2016 of Mezzanine Partners, a specialized South African manager and a pioneer in mezzanine debt, into Ethos Private Equity Group, a leading African private equity firm.
Project description
EMP 3 has a target size of USD 150m and aims to provide mezzanine financing to 10 to 15 SMEs/midcaps in East and Southern Africa. The fund will partner with established companies, which are expanding and profitable, but suffer from the lack of depth of banking markets and therefore from limited access to long-term financing. The fund will be able to operate in all types of sectors, with a preference for sectors which drive the economy in Sub-Saharan Africa (consumer goods, agribusiness, health…)
Project impact
Through this equity investment in one of the very first mezzanine funds in Sub-Saharan Africa, PROPARCO aims to support the growth and diversification of capital markets on the continent. EMP 3, through its innovative range of long-term financing and the attention it pays to the evaluation and monitoring of the environmental, social and governance performance of its investments, will contribute to the development of sustainable companies and will stimulate the creation of sustainable jobs in its regions of operation.
Furthermore, the fund has set up a Human Resources Department which encourages training for the teams (all local) and offers training to the companies invested in on CSR subjects, such as E&S management and the governance aspects. Some fifty employees from the underlying companies should be trained thanks to the fund’s support, meaning a total of 500 employees.