NORTH AFRICA – International Finance Corporation (IFC), a member of the World Bank Group, is investing up to US$20 million in SPE AIF I, the direct investment fund that focuses on Egypt and North Africa.
The Fund, which is managed by SPE Capital Partners will focus mainly on Egypt, Morocco and Tunisia, where access to equity is especially constrained because of the macro-economic and political challenges.
The investment is part of IFC’s strategy to partner with selected fund managers in key regions to meet the needs of fast-growing companies, to help mobilize additional institutional capital in high growth sectors and ultimately strengthen capital markets.
“With IFC’s support, we hope to not only provide growth capital, but also industry and value-creation expertise, which are all currently limited in MENA with focus on North Africa.
“There is growing demand for such support because businesses are increasingly recognizing the benefits of institutional ownership and professional management,” Managing Partner and CEO of SPE Capital, Nabil Triki, said.
For her part, IFC’s Regional Director for MENA, Beatrice Maser, said that by backing an experienced fund manager focused on the MENA market, IFC’s support will help signal the continued viability of private equity in the region.
“Greater access to such financing can help spur private sector development and job creation, which are both still much needed in the region,” she added.
Lack of risk capital hinders economic growth and thwarts entrepreneurship across MENA. By providing capital private equity and venture capital can play a critical role in development, helping to build the dynamic, job-creating companies that drive prosperity, provide essential goods and services, and strengthen the middle class.
IFC has invested a total of US$40.5 million in private equity and venture capital funds to support businesses in MENA during 2020.
While private equity has emerged as a critical source of equity financing for smaller cap companies globally, the penetration rate is just 0.02 percent in North Africa, compared to 0.11 percent in emerging markets