Investors update: August 2 2023 - Swedfund earmarks $22m to invest in Amethis Fund III

Swedfund earmarks $22m to invest in Amethis Fund III

Highlights

• Swedfund is investing $22 million in Amethis Fund III, which is an African fund to further support the development of the private sector in Africa. 
• The fund will help create new jobs and tax revenues through its investments across the African continent.
• Swedfund is a relatively small player with only two offices in Africa. Therefore, it is important that Swedfund can find good partners in the form of funds that have a large network around the entire African continent.

Source: ABC

Our Takeaway

Along with venture capital, private equity investments have grown significantly in Africa over the past decade. Per AVCA, $7.6 billion in private investments (both VC and PE) was poured into Africa last year across 626 deals, a remarkable 46% year-over-year increase in deal volume, impressive figures considering 2022 presented numerous challenges for private capital fund managers globally. Although private equity fundraising on the continent still faces several challenges including high-risk perception, foreign exchange risk, and economic uncertainty but backing from investors like Swedfund can help encourage other capital. 

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Mastercard partners with Lipa Later Group on BNPL

Highlights

• Mastercard has partnered with Lipa Later, a credit-led fintech, to accelerate the expansion of Buy Now, Pay Later (BNPL) payment services in Africa.
• The partnership is expected to unlock new opportunities for consumers and merchants by providing tailored BNPL solutions and enhanced payment capabilities. 
• By leveraging Mastercard’s extensive network of merchants, payment methods, and technology infrastructure and Lipa Later’s strength in consumer credit, both companies are poised to empower individuals and businesses with greater access to essential products and services.

Source: ABC

Our Takeaway

A 2021 FinAccess household survey found that Kenya has experienced remarkable growth in financial inclusion at a national level, with about 84 percent of the adult population accessing formal financial services. However, a significant portion of the population still lacks access to formal financial services. This collaboration aims to bridge that gap by providing the underbanked population and individuals with limited access to financial services, the opportunity to participate in the digital economy.

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FSD Africa Investments injects $12.7m into Nigeria’s InfraCredit

Highlights

• FSD Africa Investments (FSDAi), in collaboration with InfraCredit, have invested $12.7 million into a first-of-its-kind risk-sharing backstop facility, designed to unlock local currency funding for sustainable infrastructure development in Nigeria.
• The Risk Sharing Backstop Facility (RSBF) will address the challenge of low credit enhancement by mobilizing local institutional investment via bonds into viable early-stage or green-field climate-aligned infrastructure projects.
• By increasing the accessibility of finance for the “climate-aligned” infrastructure projects, the facility will help Nigeria accelerate its social and economic development, and green economic transition as well as deliver on its climate goals.

Source: ABC

Our Takeaway

The potential benefits of increasing climate-focused funds and programs targeting Africa are profound. Per a UN report, the continent will need between $50 and $100 billion annually by 2050 to adapt to the effects of climate change, such as droughts and floods, which can have devastating impacts on lives and economies. Supporting innovative startups and entrepreneurs who are working on climate solutions can drive technological advancements and help build resilient and sustainable economies.