Ethiopian companies to benefit from EIB backing for $100m private equity

(EBC; October 12, 2017) - The European Investment Bank (EIB) will support private equity investment across Ethiopia through support for the new USD 100m Cepheus Growth Capital Fund.

The EIB's USD 10 million participation represents the first backing for an Ethiopia focused fund and one of the first engagements with a single country private equity fund in Africa by Europe's long-term lending institution.

"The European Investment Bank is committed to fostering private sector investment across Africa. Our first support for private equity in Ethiopia, through the Cepheus Capital Growth Fund, will help leading local companies to expand and succeed," said Ambroise Fayolle, Vice President of EIB.

"The fund manager's significant financial experience and understanding of Ethiopia will ensure companies can unlock their true potential. With this new initiative the EIB will help Ethiopia, the second largest country in Africa, to meet key sustainable development goals and continue its recent impressive economic growth," he said.

Fayolle this week paid a two day visit to Ethiopia where he met business leaders, entrepreneurs and diplomats, as well as Ethiopian government officials and representatives of the Economic Commission for Africa.

The Cepheus Growth Capital Fund, founded by two Ethiopian born partners, will invest in private sector companies all over Ethiopia involved in manufacturing, consumer goods, agriculture and agro-processing. The fund is expected to invest between USD 3 million and USD 10 million in each company.

The expected first ever support for private equity investment in Ethiopia was announced in June this year during a visit to Addis by Pim van Ballekom, EIB Vice President responsible for operations in East Africa.

During his visit to Addis Vice President Fayolle also addressed the African Microfinance Week conference alongside Prime Minister Hailemariam Desalegn.

In recent years the EIB has supported investment to improve water infrastructure across Ethiopia and provided credit lines to back private sector investment.

The EIB is currently finalizing support for mobile banking in Ethiopia, it is also examining possible future backing of off-grid solar investment and financing for renewable energy projects and industrial parks.

Over the last five years the European Investment Bank has provided more than EUR 10.1 billion for investment across Africa.