The Board of Directors of the African Development Bank Group has approved an $11 million equity investment in BluePeak Private Capital Fund toward its $155 million target for final close.
The investment advances the Bank’s goal of supporting mid-size firms, including in the pharmaceuticals, agribusiness, manufacturing, and logistics sectors, across Africa. BluePeak—a flagship private capital fund domiciled in Luxembourg—will provide growth capital to middle-sized companies with the potential to become pan African market leaders.
The Fund will target adding value to portfolio companies by enabling their expansion, recapitalization, and deleveraging. It is expected to make at least eight investments of $8 million to $25 million in companies with established cash flow generation.
BluePeak’s current pipeline of investments comprises 22% agri-business, 22% manufacturing and packaging, 12% pharmaceuticals, 12% fintech and financial services, and 11% each in information technology and telecommunication, logistics, and commercial real estate. BluePeak is expected to attract investment from other development finance institutions.
Walid Cherif, co-founder of BluePeak Private Capital, said, “The commitment of the African Development Bank to our flagship fund is a strong sign of confidence in our strategy of supporting impactful businesses in Africa. SMEs in Africa are still facing financing challenges as a result of several macroeconomic setbacks. BluePeak was founded to fill part of this financing gap.”
The African Development Bank’s equity investment promises several benefits. It will ensure the fund’s adherence to the best standards.
By investing in BluePeak, the African Development Bank will support an indigenous fund manager with a strong knowledge of African markets to invest in underserved small and mid-size companies. Fund managers have identified investment opportunities across Africa, covering over 15 countries.
The African Development Bank’s equity investment is expected to contribute to the creation of 1,142 full-time jobs. It will support the construction of 6,400 telecommunication towers, and an increase in the production of malaria drugs from 33 million units in 2022 to 75 million units in 2027.
As seven of the portfolio firms operate in rural areas, the investment will also serve women and other vulnerable members of communities, particularly in agribusiness.
The BluePeak Fund investment strategy is aligned with the African Development Bank’s High 5 priorities, particularly to: industrialise Africa, improve the Quality of Life for the People of Africa, and feed Africa.
The equity investment will contribute to integrating Africa at the continental and the regional levels through private sector promotion. The investment is also in line with the African Development Bank’s priorities for the development of the private sector through support for small and medium-sized enterprises. In addition, it will also advance the Bank’s strategy to develop Africa’s pharmaceutical manufacturing capabilities continent-wide.