A consortium of six development finance institutions (DFIs) has signed a pact to back micro, small and medium-sized corporates across Africa.
International Finance Corporation (IFC) has partnered with five development financiers to set up the Alliance for Entrepreneurship in Africa (AforE), which will look to jointly invest across the continent.
The investor has backed the creation of AforE alongside European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB).
Other member DFIs include the European Development Finance Institutions (EDFI), Proparco and African Development Bank (AfDB).
The French Treasury, the French government’s financial advisory platform, is also part of the alliance. IFC has been appointed secretariat of the alliance.
“Small businesses and entrepreneurs in Africa are drivers of inclusive growth, economic stability and resilience. Supporting their growth will be critical to creating jobs and helping Africa recover from the COVID-19 crisis, said Makhtar Diop, managing director at IFC. “And the Alliance for Entrepreneurship in Africa stands ready to do that. IFC is proud to be part of this initiative, which deepens the partnership between international partners to give small businesses the support they need and deserve.”
Solomon Quaynor, vice president for the private sector, infrastructure and industrialisation at AfDB represented the DFI.
Odile Renaud Basso, president at EBRD represented the development financier.
Ambroise Fayolle, vice president at EIB represented the investor.
Søren Andreasen, chief executive officer (CEO) at EDFI also represented the investor.
Proparco was represented by CEO, Gregory Clemente.
Emmanuel Moulin, director general, represented the French Treasury.
AforE will look to drive collaboration among the member DFIs in a bid to provide co-investments in micro, small and medium-sized companies.
The platform will have a leaning towards women and youth-owned early-stage companies.
In addition to deals, the alliance will back reforms aimed at strengthening businesses and the investment climate across Africa – with a leaning towards green and technology.
The alliance will look to bring additional development financiers and donors to the platform.
AforE has been set up to also be attractive to financial institutions, foundations, philanthropic organisations, venture capital firms, incubators, accelerator platforms and universities.
This comes after 17 DFIs from 16 Organisation for Economic Co-operation and Development (OECD) countries, called the DFI Alliance signed a pact, in 2020.
The DFI Alliance signed the pact to offer liquidity to the capital markets – across emerging markets in a bid to curb the financial impact of COVID-19.
DFI Alliance is an agreement signed in 2019 by 17 DFI’s to back investments in emerging markets, encompassing the US International Development Finance Corporation’s (DFC) and FinDev Canada. The alliance also includes 15 development financiers under the EDFI umbrella.
This agreement covers co-investments in funds and businesses, technical assistance and knowledge-sharing.