Africa-Press – Gambia. The fund targets companies in the manufacturing, healthcare, agriculture, and telecommunications sectors.
The News:
Swedfund invests $15 million in TLG Capital’s AGIF II to support African SMEs.
The fund focuses on SMEs experiencing financial stress, providing flexible debt solutions.
AGIF II seeks to preserve and create jobs in sectors such as manufacturing and agriculture.
Swedfund, Sweden’s development finance institution, has committed $15 million to TLG Capital’s Africa Growth Impact Fund II (AGIF II) to support small and medium-sized enterprises (SMEs) across Africa. This investment is part of a $75 million first close for the fund, which also includes contributions from the International Finance Corporation (IFC), Norfund, and Bpifrance.
AGIF II is focused on offering flexible, long-term debt financing to viable SMEs facing temporary financial distress. In collaboration with local banks, the fund provides loans with customized terms and interest rates to support the recovery and sustainable growth of these businesses.
Jakob Larsson, Senior Investment Manager at Swedfund, highlighted the critical role of SMEs in Africa’s economy, pointing out that they employ 80% of the workforce and create nine out of ten new jobs on the continent.
“Protecting existing jobs and creating new ones is essential for poverty reduction. For African SMEs to thrive, it is vital to have a functional market with tailored financial services that address the unique local challenges they face.”
The Fund’s innovative structure blends debt financing, equity participation, and guarantees from local banks, offering SMEs access to capital that traditional banking systems often cannot provide. This model fosters business recovery and aids in job preservation and creation, particularly within the manufacturing, healthcare, agriculture, and telecommunications sectors.
In Nigeria, the Fund has identified potential beneficiaries, including Terra Aqua, an aluminium recycling company in Ogun State, which is set to receive $7.5 million in debt financing, subject to meeting environmental, social, and governance (ESG) criteria. This investment is projected to create 200 direct and 752 indirect jobs, demonstrating the Fund’s positive impact on local economies.
AGIF II builds on the strategy of its predecessor, Africa Growth Impact Fund I, with a goal of reaching a total fund size of $200 million. By focusing on SMEs, the Fund aims to bridge the financing gap faced by many small businesses, thereby promoting inclusive economic growth across Africa.
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