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Proparco is renewing its support for the emergence of the middle class in Africa via an equity investment in the African Development Partners 3 fund

Project

Investment funds

Signature date
Location
Algeria, Botswana, Burkina Faso, Côte d'Ivoire, Ghana, Kenya, Morocco, Mauritania, Niger, Nigeria, Mozambique, Namibia, Uganda, Tanzania, Tunisia, Multi-country Africa
Financing tool
Equity investment
Financing amount (Euro)
8900000
Financing details
USD 10m equity investment
Customer
African Development Partners 3
Type of customer
Investment fund
Country of headquarters
Jersey
Project number
IZZ1076
Environmental and social ranking
IF-A
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This information is given at the time of signature, without prejudice to any developments in the operation/project.

Following the success of the first two funds ADP 1 and 2, PROPARCO is investing in African Development Partners 3, which is dedicated to developing and financing SMEs and midcaps in Africa. The fund is continuing its investment strategy focused on the emergence of the middle class in Africa.

Client presentation

Development Partners International (“DPI”) has raised a successor fund, African Development Partners 3 (“ADP 3”), dedicated to developing and financing SMEs and midcaps in Africa. The fund aims to continue the investment strategy (focused on the emergence of the middle class in Africa) that made the success of the first two funds, ADP 1 and 2. 

Project description

The investment strategy is to invest in companies that benefit from the growth of the emerging middle class in Africa. DPI has invested in 21 portfolio companies operating in over 30 countries across Africa. The ADP funds are top-quartile as benchmarked by Cambridge Associates and other global benchmarks. DPI’s investor base consists of pension funds, endowment funds/foundations, funds of funds and development institutions.

This project is part of the 2X Challenge initiative. This multi-stakeholder initiative aims to support projects that empower women as entrepreneurs, business leaders, employees and consumers of products and services, and increase their participation in the economy. 

This initiative thus contributes to Sustainable Development Goal #5 (Gender Equality).

Project impact

This operation is expected to have major impacts on the development of countries:

  • Based on the performance of the predecessor fund ADP 2, the ADP 3 fund is expected to support some 17,300 direct and indirect jobs over the next 5 years;
  • ADP 3 aims to support between 8 and 14 companies (including a priori 3-4 SMEs) in the sectors of consumer goods, health, distribution, financial services, education and telecommunications. The fund’s strategy is to invest in companies that meet the needs of middle classes in Africa. This new fund will continue the generalist sectoral investment strategy of the predecessor funds, while pursuing its efforts to extend its geographical area towards countries where capital injections are complicated, such as Ethiopia, Zimbabwe and Madagascar.

 

DPI stands out from its peers as a signatory to the “Operating Principles for Impact Management” (one of the first signatory African funds). DPI is also a signatory to the United Nations Principles for Responsible Investment (PRI).