Press release -
Swedfund invests in preservation and creation of African SME jobs
Swedfund is investing USD 15 million in TLG Africa Growth Impact Fund II (TLG II). Through the investment, Swedfund aims to support the preservation and creation of decent jobs in small and medium size companies that otherwise struggle to find financing.
Small and medium sized companies (SMEs) in Africa often struggle to access debt capital structured to fit their needs. This is particularly dire for the viable but temporarily distressed SMEs inhabiting commercial bank portfolios. Through the investment in TLG II, Swedfund bridges this gap by supporting a scalable credit solution that enables the growth of local companies, enhancing protection of at-risk jobs and sustainable creation of new ones.
- SMEs employ 80 percent of the African workforce, and nine out of ten new jobs on the continent are created by growing companies. To protect existing jobs and to create new ones is crucial for poverty reduction. For African SMEs to survive and grow, it is important that there is a functioning market with the right, fit for purpose financial services addressing diverse local challenges. Through this investment we help achieving that, generating long-term impact, says Jakob Larsson, Senior Investment Manager, Swedfund.
TLG II has a for the African market innovative structure and combines flexible, long-term debt to SMEs with equity participation and guarantees issued by local banks. This allows TLG to offer loans with tenors and interest rates that allow viable but struggling SMEs to unlock sustainable recovery and grow their businesses sustainably.
The investment is done alongside Norfund, the IFC and BPI France and sums up to a total of USD 75 million. Swedfund has an existing relationship with TLG through its investment in TLG Credit Opportunities Fund in 2018.
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About Swedfund
Swedfund is Sweden’s development finance institution with the mission to reduce poverty through sustainable investments in developing countries. Swedfund plays an important role in the implementation of the 2030 Agenda and the Paris Agreement on climate. Swedfund shares the same goal as development cooperation in general, but the tools Swedfund uses are different. Swedfund has two instruments to fulfil its mission: sustainable investments in the private sector and technical feasibility studies through the Project Accelerator targeting the public sector.
Swedfund's investments contribute to the creation of decent jobs and increased access to essential products and services such as electricity and food. Swedfund is a long-term investor and is additional and catalytic through its investments and by mobilising private capital. Swedfund's feasibility studies support sustainable public infrastructure development, trade, and export opportunities for Swedish solutions.
We are part of Swedish development cooperation, and we measure and report all our results. As a state-owned company, Swedfund is managed by the Ministry of Finance and financed through portfolio reflows and annual capital injections for which the Swedish Ministry for Foreign Affairs is responsible.
For more information: please visit www.swedfund.se/en
