NAIROBI, Kenya, Mar 29 – French sovereign wealth fund Proparco will increase its investment activities in Kenya and Africa by 2025, with a 50 percent focus target.
The subsidiary of the French Development Agency (AFD) says that it will capitalize on the expertise of the African continent to support businesses.
Investments will finance infrastructural projects that are essential for the deployment of African businesses, besides supporting SMEs, microbusinesses, and high-impact startups.
Projects that mitigate climate change as well as reduce territorial, gender, or socio-economic inequalities will be given priority.
This, it says, will strengthen local production and processing capacities for vulnerable local companies affected by major global crises such as the Ukraine war as well Covid-19’s economic impact.
“Impacts will be identified and analysed at all stages of the relationship with Proparco’s partners; from the beginning of project appraisal through a sustainable development rating, through project implementation thanks to more extensive and longer-term technical support, and up to the final evaluation through the analysis and monitoring of results (both estimated and actual),” Proparco said in a statement.
“Thus, the impact from projects carried out by our partners will not be limited to the final and quantitative results of the project but will also include projects’ capacity to evolve in terms of ESG criteria, which will enhance sustainability over the long term,” it added.
African SMEs and micro-businesses now contribute a huge chunk of economic developments as well as innovations on the continent.
However, a majority of them cannot access capital to grow their businesses. Only 20 percent can access bank loans.
“We are determined to go where other investors have not yet gone, by moving closer to the field to be as close as possible to our partners’ and their needs, to deploy our resources effectively,” Proparco Chief Executive Officer Françoise Lombard said.
“We are therefore making a big call towards enabling growth in new markets and taking more risk to help more innovative projects to bear fruit,” he added.
To support this, Proparco expects additional resources from the French government and the European Union through increased funding and nonfinancial support.
Proparco owns a significant stake in Naivas Supermarket in Kenya.
Between 2018 and 2022, the company committed $3.8 billion to Kenya, Ghana, Rwanda, and Nigeria.
