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Analysis > Interviews

Proparco : Africa - a core priority

Anna Lyudvig
May 15, 2016, midnight
108

Word count: 636

In 2015, Proparco, the private sector financing arm of Agence Française de Développement (AFD), earmarked 62% of its financing approvals, approximately €648m, for Africa. These results confirm its strong commitment on the continent, which is in line with the objective set by the French President to provide €20bn of financing to Africa by 2018. Support for renewable energy, tourism and the financial sector, which is essential to finance the local economic base, accounted for the bulk of its operations on the continent. AGF catches up with Jérémie Ceyrac, Deputy Head of Private Equity Division at Proparco, to learn more.

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In 2015, Proparco, the private sector financing arm of Agence Française de Développement (AFD), earmarked 62% of its financing approvals, approximately €648m, for Africa. These results confirm its strong commitment on the continent, which is in line with the objective set by the French President to provide €20bn of financing to Africa by 2018. Support for renewable energy, tourism and the financial sector, which is essential to finance the local economic base, accounted for the bulk of its operations on the continent. AGF catches up with Jérémie Ceyrac, Deputy Head of Private Equity Division at Proparco, to learn more.

Africa Global Funds (AGF): Why Africa remains a core priority for Proparco?

Jérémie Ceyrac (JC): Africa remains all too often bypassed by international investment flows. Development issues in the continent are nevertheless huge, and massive funding is required in areas such as infrastructure, health, education, agribusiness, etc.  Our mission as a development finance institution is to foster private investment in these areas, with the aim of supporting a sustainable and inclusive growth. Our goal is also to demonstrate that private sector solutions can be viable in the continent, both in pioneering business areas, sectors and geographies that investors consider too risky.

AGF: In which African countries do you see opportunities?

JC: Western Africa remains a key area of focus for Proparco, particularly Cote d’Ivoire, which is driving the economic activity of the region. The less mature markets of Eastern Africa will also continue to have our attention in the next years, such as Uganda and Ethiopia. Kenya and certain Southern Africa economies will continue to have the capability to absorb larger single tickets. Last the MENA region continues to be essential to Proparco and we expect to keep supporting the private sector in North Africa, as a means to foster quality jobs creation.

AGF: How much are you willing to allocate to Africa this year?

JC: We do not have a set target for Africa – in line with the wider Proparco activity though, we can expect roughly 50 to 60% of our activity to be geared towards the continent in 2016, representing more or less €100m in new equity commitments towards funds this year.

AGF: Do you have any deals in the pipeline? JC: Without being able to comment too specifically on our pipeline for confidentiality reasons, we continue to see strong demand from sector-specific initiatives in the renewable energy and agribusiness spaces. Education, either through funds or direct investing will also be an area where we expect to see a few transactions happening. A few generalist pan-African funds led by well-established GPs are also currently on the market and we expect to support a number of them.

AGF: What's Proparco's commitment to Africa focused funds? And which African funds have you supported last year?

JC: Proparco’s commitment to Africa-focused funds is approximately €280m as at December 31, 2015. Last year, Proparco invested in the Abraaj North Africa Fund II, with a total commitment of $20m Through FISEA, a captive vehicle dedicated to Africa which we manage on behalf of our parent company AFD, we supported Energy Access Ventures Fund, I&P Développement 2, Meridiam Infrastructure Africa Fund, Novastar Ventures East Africa Fund and Enko Africa Private Equity Fund for a combined amount of c. €40m. We were also active through our direct equity strategy, backing companies in the healthcare space in East Africa and education in North Africa.

AGF: Are you planning any allocations to Africa funds this year?

JC: We will continue to support our partner GPs that are launching several hundred USD sector-agnostic & pan-African funds this year but also help catalyze new teams or strategies through sector specific funds targeting agribusiness, healthcare and education. Proparco will continue to favor regional funds as opposed to single country vehicles though.

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