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Proparco will help bridge the long-term financing gap for Egyptian mid-cap companies via a USD 11m investment in LCP Fund II.
Client presentation

Incorporated in 2015, Lorax Capital Partners (“LCP”) is an Egypt-focused private equity firm. Over the last 5 years, LCP has supported the Egyptian American Enterprise Fund (“EAEF”) by deploying some USD 175m in 5 companies. One of their most notable investments has supported Fawry, the largest electronic payment network in Egypt, which made its debut listing on the Cairo Stock Exchange in August 2019. Fawry was also the first unicorn (a start-up valued at over USD 1bn) in Egypt and one of the first in Africa. As a capital investor specialized in growth companies, LCP’s specificity is its strong focus on technology, which the team integrates as a core component in its investment case.

Project description

With a target size of USD 250m, the new fund plans to support profitable and growing mid-cap companies in promising sectors of the Egyptian economy, promoting local consumption and production as well as financial inclusion. The fund will also target companies seeking to develop regionally. The manager will aim to implement environmental and social and governance best practices in the companies it supports, while helping them to increase their value creation.

Project impact

Proparco’s investment will support economic development and job creation in Egypt, thereby contributing to Sustainable Development Goal N° 8 “Decent Work and Economic Growth”. The main expected economic and social impacts of the project concern the support for the technological upgrading of eight companies in Egypt. By participating in the 1st closing of the fund, Proparco is also supporting the development of private equity investment in Egypt and the region. This operation will thereby contribute to reducing the long-term financing gap for SMEs and mid-cap companies in Egypt (4,700 direct local jobs supported, including some 530 held by women, jobs in the investee companies), a role made even more crucial in this period of economic downturn caused by the Covid crisis.

09/30/2020
Date of signature of the project
Egypt
Location
Financing tool
10 000 000 Euros
Amount of funding
USD 11m equity investment
Financing details
LCP FUND II COOPERATIEF U.A.
Client
CES