The African Development Bank has invested $15 million in Catalyst Fund, a private equity fund based in Kenya which invests in consumer goods, services, and agribusiness in the East Africa Community.
The Board of Directors of the African Development Bank (AfDB) approved on Wednesday 20 October 2010 in Tunis, a USD 15-million equity investment in Catalyst Fund, a 10-year multi-sector private equity based in Kenya primarily covering the East Africa Community (EAC) as well as DRC, Ethiopia and Zambia.
The target market has a population of 280 million, with a USD 126 billion combined GDP.
The Fund will invest in medium-sized companiess which have a business track record and growth prospects. The local companies will be grown into larger regional corporations supplying products and services across East Africa and beyond.
The Catalyst Fund is primarily investing in:
Consumer goods such as food and personal care;
Services such as the financial sector, technology and telecoms; and
Industries such as packaging and agribusiness.
The key sectors targeted by the fund are experiencing rapid growth as a result of the region’s sustained economic expansion that has led to increased personal income and changes in life style.
The fund will add value to investee companies by providing them with operational and strategic support. Investments will increase employment, tax and economic growth. The targeted sectors heavily employ women. Jobs that will benefit women are projected to represent 40 percent of the total number of jobs created. By supporting a fund managed by local businessmen, talented Africans will be retained in Africa. The Fund also aims to facilitate regional integration through the expansion of the operations of investee companies into neighboring countries.
The investment in Catalyst Fund aligns well with the region’s priorities. It will promote private sector growth by facilitating access to financing for Africa’s medium-scale enterprises. It is a regional fund that primarily aims to capture the growth potential in East Africa as a result of the moves toward closer regulation, trade and economic ties. The fund also responds to the Bank’s emphasis on supporting indigenous fund managers with regional knowledge and networks.