The Fund for Export Development in Africa (FEDA), an impact investment arm of the African Export-Import Bank (Afreximbank), has raised $670 million in its first close across four fund strategies to promote industrialization, value-added export development, and intra-African trade.
$270 million of the $670 million raised will be allocated to the FEDA Direct Equity Fund I, which will provide equity and quasi-equity financing to companies aligned with the organisation’s goals.
Another $250 million will go to the Strategic Initiatives Fund, an Afreximbank-owned fund created to implement ground-breaking and highly-impactful greenfield investments in industries crucial to the expansion of intra-African trade and value-added export development throughout the African Continent.
Read also: Cell C completes recapitalization arrangement that lowers its debt
The third tactic is the establishment of a private credit fund called Africa Credit Opportunities Fund, L.P. (“ACOF”), which has US$125 million in committed funding and is co-sponsored by FEDA and Gateway Partners Group. To boost trade facilitation and economic progress in Africa, ACOF will invest in loan instruments.
The fourth strategy of FEDA is the creation of a US$25 million Venture Fund to finance high-impact early-stage companies throughout Africa using stock, quasi-equity, and venture loans.
With the assistance of like-minded Limited Partners, FEDA Investment Manager hopes to raise a total of US$1.3 billion across the four fund strategies by 2024.
FEDA to manage AfCFTA
Prof. Benedict Oramah, President and Chairman of Afreximbank, said: “We are very pleased with this first close which is a first step in financing the equity gap in the trade sector in Africa. FEDA fund strategies will also facilitate and increase foreign direct investment in the trade and export sectors by attracting leading institutions’ keen interest in Africa’s development.”
Additionally, FEDA has been chosen to manage the Adjustment Fund for the African Continental Free Trade Area (AfCFTA). By the first quarter of 2023, this Fund—a partnership between the AfCFTA Secretariat and Afreximbank—should be up and running. The African Continental Free Trade Agreement Fund will fund the public and commercial sectors to aid in the implementation of the agreement.
About FEDA
The African Export-Import Bank (Afreximbank or the Bank) established the Fund for Export Development in Africa (“FEDA”) as its impact investment subsidiary to provide equity, quasi-equity, and debt capital to finance the multibillion-dollar funding gap (particularly in equity) required to transform the trade sector in Africa. It is Headquartered in Kigali (Rwanda).
Along the intra-African trade, value-added export development, and manufacturing value chain, FEDA pursues a multi-sector investment strategy that includes financial services, technology, consumer and retail goods, manufacturing, transport & logistics, agribusiness, as well as ancillary trade enabling infrastructure like industrial parks.
FEDA strengthens and promotes the value distributors, and dealers provide to manufacturers, consultants, service representatives and customers through value-focused member services and targeted marketing initiatives. Among its policy interests are economic and trade, energy and the environment, labour and immigration, legal and regulatory reform, health care, technology, and transportation and infrastructure.
Additionally, the Association ensures members have access to the latest industry information and relevant educational materials, including training for new distributor and dealer technologies. It serves distributors, dealers, manufacturers, and associates meeting FEDA membership eligibility requirements. FEDA also offers manufacturer and industry partner memberships.