Press release -
Swedfund invests USD 10 million in the ASEAN Frontier Markets Fund (AFMF) to promote job creation in Cambodia and Laos
Swedfund invests USD 10 million in the ASEAN Frontier Market Fund (AFMF). The main purpose of the investment is to support small and medium-sized companies and contribute to job creation and development, including through the promotion of gender equality, climate resilience, strong ESG standards and financial inclusion in the countries of Cambodia and Laos.
One of Swedfund's goals is to invest in the most vulnerable and poorest countries, according to the OECD's definition. Cambodia and Laos are examples of countries in Southeast Asia that, according to the OECD/DAC list, are in the category of least developed countries. AFMF provides capital to strengthen and scale up regional growth-oriented SMEs that are key players in the private sector, to contribute to economic development.
- The investment in AFMF is a way for us to reach more small companies that can invest and create jobs that are so important in developing countries. It is a challenging context that means that both countries are characterized by high poverty and a great need for investments to create jobs with decent working conditions, says Sofia Gedeon, Head of Sustainable Enterprises at Swedfund.
Before the pandemic, Cambodia was one of the fastest growing economies in the world. However, the country was hit hard by the pandemic and economic growth stalled, with the potential to reverse recent improvements in poverty. The country has emerged well from the COVID period and although still a challenging environment including the human rights situation, forecast resumed growth provides new opportunities for the fund and its companies to address poverty and contribute to equitable development.
Over the past twenty years, Laos has made great strides in development by halving poverty, reducing malnutrition, and improving education. However, economic growth has slowed down over the past two years and there is a risk that the country will fall back in development, absent renewed and responsible investments.
This is Swedfund's first investment in a fund focusing on Cambodia and Laos. AFMF will be managed by Emerging Markets Investment Advisers (EMIA), a Singapore regulated fund manager focused on frontier ASEAN.
The deal was signed on December 20, 2022.
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About Swedfund
Swedfund is Sweden's development finance institution with the mission to contribute to poverty reduction through sustainable investments in developing countries. Our investments in the private sector contribute to a growing number of jobs offering decent working conditions and increases access to essential products and services like electricity and healthcare. Climate and gender are themes that permeates our investment process.
Swedfund invests in energy & climate, financial inclusion and increased access to capital for micro, small and medium-sized companies as well as healthcare and digitalization.
We are part of Swedish development corporation, and we measure and report all our results. As a state-owned company, Swedfund is managed by the Ministry of Finance. We are financed through reflows from the portfolio and capital injections from the development assistance budget. The return from the portfolio finances our operations and we reinvest reflows from our portfolio in new projects, i.e. we recycle our capital injections.
For more information: please visit www.swedfund.se/en| www.edfi.eu
