Local firms eye funding from Afreximbank unit

…As Zim signs FEDA establishment agreement



Zimbabwe has signed the establishment agreement of the Fund for Export-Development in Africa (FEDA) a move which unlocks funding for local firms starved of funding to recapitalise and capitalise on the huge demand created by African single market.

The accession, which was recently done by President Emmerson Mnangagwa, makes Zimbabwe the sixth signatory to the establishment agreement of FEDA, a development impact-oriented subsidiary of African Export-Import Bank (Afreximbank).

This accession marks another significant step forward in Afreximbank’s efforts to mobilise its Member States to sign and ratify the Establishment Agreement of FEDA, Afreximbank said, adding that it demonstrated the “growing support for FEDA as a new multilateral development platform”.

Benedict Oramah, Afreximbank’s president and chairman of the board of directors, said the signing of the establishment agreement by Zimbabwe “is an important step that will pave the way for the ratification of the Agreement in the coming months, thereby facilitating increased investment by FEDA in Zimbabwe”.

“FEDA’s mandate is critical to African economies as it provides long term capital with a focus on industrialisation, intra-African trade and value-added exports. We look forward to mobilising other Afreximbank Member States in due time to support FEDA’s pan-African expansion,” Oramah said.

Marlène Ngoyi, FEDA chief executive officer, said the “promising development builds on FEDA’s track record of investing in companies operating in Zimbabwe that are strategically aligned in promoting industrialisation, intra-African trade and value-added exports”.

“The investments include a corporation in the TMT sector that provides vital digital infrastructure to support Africa’s connectivity and trade with the rest of the world. FEDA is committed to intervene further in the country in the near future,” Ngoyi said.

FEDA is the impact investment subsidiary of Afreximbank set up to provide equity, quasi-equity, and debt capital to finance the multi-billion-dollar funding gap (particularly in equity) needed to transform the Trade sector in Africa.

Headquartered in Kigali, Rwanda, FEDA pursues a multi-sector investment strategy along the intra-African trade, value-added export development, and manufacturing value chain which includes financial services, technology, consumer and retail goods, manufacturing, transport and logistics, agribusiness, as well as ancillary trade enabling infrastructure such as industrial parks.

FEDA recently announced its first close of US$670m across its four fund strategies. Of the US$670m raised, US$270m is earmarked for FEDA Direct Equity I which will provide equity and quasi equity financing to businesses aligned with FEDA mandate.

Of the amount raised US$250m is allocated to the Strategic Initiatives Fund, a proprietary fund established by Afreximbank to implement landmark and high impact greenfield investments in sectors critical to the growth of intra-African trade and value-added export development across the continent.

The third strategy involves the implementation of a private credit fund, Africa Credit Opportunities Fund (ACOF), jointly sponsored by FEDA and Gateway Partners Group with a commitment of US$125m.

ACOF will invest in credit instruments to support trade and growth in Africa.

FEDA’s fourth strategy involves a US$25m Venture Fund to provide equity, quasi-equity and venture debt financing to high-impact early-stage ventures across Africa.

FEDA Investment Manager targets to raise a total of US$1.3bn across the four fund strategies by 2024, with the support of like-minded Limited Partners.



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