The African Development Bank (AfDB) has approved an equity investment of up to $45m in Atlantic Coast Regional Fund II (AFIG Fund II), a 10-year $300m multi-sector private equity fund.

Solomon Asamoah, AfDB’s Vice-President, Infrastructure, Private Sector and Regional Integration, said that the Bank’s notable support and lead role in the fundraising follows the “exceptional initial and projected results that the Fund has managed to achieve in difficult markets”.

“It has created a niche in strategic mid-capital industries and geographic segments where many other private equity funds are less visible,” he said.

AFIG Fund II is managed by the Advanced Finance and Investment Group (AFIG Funds), a Mauritius-registered limited liability company headquartered in Dakar, Senegal.

The Fund focuses on West, Central and East Africa, including transitional states and low/mid-income countries in that region.

AfDB’s financial contribution will enable AFIG Fund II to scale up its operations and thus its contribution to regional economic growth, poverty reduction, capital markets development, and regional integration.

AfDB said this new investment will increase development impact and socio-economic benefits through the creation of an estimated 1,687 additional new jobs, development of local entrepreneurship, regional integration, and will create additional fiscal revenue to regional governments.

The proposed investment is aligned with the AfDB’s Private Sector Operations Strategy to support entrepreneurship and is consistent with the Regional Integration Strategy of the target regions.

AfDB’s lead role is catalytic in the provision of scarce capital to a largely underserved market, and will reassure other participating DFIs and provide comfort to minority African investors of the Fund.

Papa Madiaw Ndiaye, CEO of AFIG Funds, said, “We are pleased to receive the backing of the African Development Bank in AFIG Fund II, which is a strong signal of the Bank’s commitment to supporting indigenous African fund managers to catalyze growth and sustainable development across the African continent.”

“This commitment is further illustration of the continued support by one of our key investors of our efforts to turn mid cap enterprises into the next African blue chips,” he said.

With this investment, AfDB is supplementing its earlier investment of $25m in AFIG-I.

As at date, AFIG Fund-I is fully committed and has begun exiting from initial investments.

The Fund manager has developed a strong pipeline of over $400m for potential new investments.