Swedfund invests in private credit funds to support African mid-sized companies in enhancing job creation and catalyzing local economic growth

The Swedish development finance institution, Swedfund, invests a total of MUSD 45 in two private credit funds to support sustainable economic growth and gender equality.

The war in Ukraine has had a major impact on the global economy, with effects including rising inflation, interest rates, and the availability and affordability of food, fuel, and other goods. Macroeconomic effects add a layer of complexity to the existing challenges in the sub-Saharan Africa region, which has just begun its economic recovery following the Covid-19 pandemic.

Strengthening the growth and resilience of SMEs and mid-sized companies is crucial for employment generation and local economic development. Many African mid-sized companies are underserved as they lack the collateral and formal credit history to attract funding from banks. Development finance institutions like Swedfund have an important role to play in supporting actors who aim to address this mid-market financing gap.

By investing in two leading Africa-based credit funds BluePeak Private Capital Fund (BluePeak) and Vantage Mezzanine Fund IV (Vantage), Swedfund seeks to increase the availability of long-term growth capital for mid-sized companies and support the upscaling of businesses on the continent. This in turn is expected to lead to significant job creation as well as increased access to essential goods and services, such as medicines and connectivity and communications services.

- With these investments, Swedfund will help to close the funding gap for mid-sized companies. The Funds play an important role in providing companies with tailored financing, which will enable them to focus on growth and creating jobs, says Maria Håkansson, CEO of Swedfund. We are also looking forward to work closely with the fund managers in advancing their strategies on increased gender equality, both at the Fund level as well as in their respective portfolio companies, Maria Håkansson continues.

BluePeak is a sector-agnostic Pan-African fund investing throughout the capital structure to tailor long term capital solutions designed to support a company’s growth plans and generate positive and economic impact. BluePeak’s financing solutions bring potential for large scale impact to SMEs and mid-market companies with a specific commitment to gender lens investing, inequalities reduction, and climate mitigation. BluePeak is 2X Challenge qualified on the basis of its work and further commitments to accelerate women’s economic empowerment and promotes gender equality both at BluePeak and within its investee companies. Swedfund commits MUSD 20 to BluePeak.

Vantage is the largest and one of the most experienced mezzanine investors on the African continent focusing on high-growth, mid-market businesses. Vantage invests sector-wide, but with some prioritized sectors with expected positive impact on communities, such as ICT, healthcare and infrastructure. Swedfund commits MUSD 25 to Vantage.