NIGERIA – CDC Group plc, the UK’s development finance institution, has announced a commitment of US$25 million to a local fund backing small and medium-sized businesses in Nigeria.
The investment in Nigerian-led, Synergy Private Equity Fund II (“Synergy II”), which invests in high-growth SME businesses in Nigeria and its West African neighbours, will enhance CDC’s goal of supporting SMEs to help build sustainable businesses, create jobs and improve economic prosperity in the region.
The investment has enabled Synergy II to raise a total of US$232 million of capital, with the fund targeting a total of US$300 million.
It makes the second the CDC has invested in Synergy’s funds, having placed another investment in its first fund.
CDC further plans to open a regional office for West Africa in Lagos in early 2019to enhance its plans in the region.
CDC says it aims to invest in Nigeria’s capital markets and encourage more domestic and foreign investment.
“Nigeria plays a key part in our strategy of partnership and investment for economic growth in West Africa. CDC’s support for Synergy Fund II will help to boost Nigeria’s high-growth SMEs, supporting local entrepreneurs, job creation and economic development,” said CDC’s Chief Executive, Nick O’Donohoe.
“We recently announced our ambition to invest up to US$4.5 billion across Africa over the next four years. This latest US$25 million commitment and new office launch builds on our recent momentum in Nigeria and demonstrates our commitment,” he added.
CDC has played a pioneering role in supporting the private equity industry in Nigeria which channels growth capital to companies.
Twenty years ago, CDC backed Nigeria’s first private equity fund, the Capital Alliance Private Equity Fund I (CAPE I) from African Capital Alliance and has invested in all five of its subsequent funds.
African Capital Alliance remains a market-leading investor in Nigeria.
CDC has been active in Nigeria for 70 years and currently has almost US$400 million invested in the country. Its portfolio of 82 businesses support 41,000 direct jobs.
Recent CDC investments in Nigeria include Afreximbank, Jumia, Indorama and Azura Power.