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Africa Private Equity and Debt Programme

Overview

Abstract

A pan-Africa programme that aims to support the development of private capital markets in Africa to complement public markets.

The programme’s overarching goal is to improve the availability of long-term financing for priority social and economic sectors in Africa by mobilising private equity and debt capital. Overall, the programme seeks to increase local institutional (particularly pension fund) investor participation in private equity and debt in the continent to complement development finance institutions’ financing.

The programme aims to achieve this through:

  • Creating a facilitative enabling environment by working with regulators to put in place regulations and policies to enable private equity and debt investments by relevant institutional investors;
  • Working with market participants on demonstration transactions that provide an avenue or vehicle for such investments
  • Capacity and knowledge development of relevant stakeholders, research, advocacy and impact reporting.

Results

  • Facilitative regulatory environment for the development of private capital markets enabled.
  • Capacity and knowledge of Pension funds, regulators and other relevant stakeholders in private markets (private equity and private debt) strengthened.
  • Innovative funding structures and transactions enabled leading to increased investment in private markets by pension funds.
  • More private capital is allocated to the real economy for inclusive economic growth.
  • Achievement of social impacts such as; (i) creating and sustaining jobs, (ii) increasing individuals’ access to basic services (e.g.housing and healthcare) (iii) helping individuals, households and communities in target countries cope with climate change.

Project Details

Project Title

Africa Private Equity and Debt Programme

Implementing Partner

Africa Venture Capital Association (AVCA), Southern African Venture Capital and Private Equity Association (SAVCA), East Africa Venture Capital Association (EAVCA), Nigeria Private Equity and Venture Capital Association (PEVCA), Ghana Venture Capital Association (GVCA) Regulators, PE Firms

Donor(s)

FSD Africa

Value (in £)

TBC

Implementation Period

November 2020 to March 2025

Countries Covered

Pan - African

Project Description

A pan-Africa programme that aims to support the development of private capital markets in Africa to complement public markets.

The programme’s overarching goal is to improve the availability of long-term financing for priority social and economic sectors in Africa by mobilising private equity and debt capital. Overall, the programme seeks to increase local institutional (particularly pension fund) investor participation in private equity and debt in the continent to complement development finance institutions’ financing.

The programme aims to achieve this through:

  • Creating a facilitative enabling environment by working with regulators to put in place regulations and policies to enable private equity and debt investments by relevant institutional investors;
  • Working with market participants on demonstration transactions that provide an avenue or vehicle for such investments
  • Capacity and knowledge development of relevant stakeholders, research, advocacy and impact reporting.

Target results

  • Facilitative regulatory environment for the development of private capital markets enabled.
  • Capacity and knowledge of Pension funds, regulators and other relevant stakeholders in private markets (private equity and private debt) strengthened.
  • Innovative funding structures and transactions enabled leading to increased investment in private markets by pension funds.
  • More private capital is allocated to the real economy for inclusive economic growth.
  • Achievement of social impacts such as; (i) creating and sustaining jobs, (ii) increasing individuals’ access to basic services (e.g.housing and healthcare) (iii) helping individuals, households and communities in target countries cope with climate change.

Progress

Developing an enabling environment

  • Supported the Capital Markets Authority (CMA) in Kenya in finalising the policy framework for private equity and venture capital in Kenya. The CMA board approved the policy framework in 2021.
  • Supported EAVCA on a benchmarking study on regulatory options for private equity and venture capital in Kenya. The recommendations from the study were presented to CMA Kenya and were considered during the development of the CMA Kenya policy framework.
  • Supporting the development of a business case for Start-up policy reforms in South Africa in partnership with SiMODiSA.

Capacity building, research and advocacy

  • Study on Private debt Markets in Africa: FSD Africa engaged Lions Head Global Partners in July 2021 to conduct a study to help understand the landscape of Africa’s private debt markets. The study assessed market features such as size, evolution, management, structure, investment sectors, regulation, and investor appetite. The study findings are expected to inform other initiatives under the Africa Private Equity and Private Debt Programme, such as transaction support, regulatory initiatives, and knowledge & capacity building engagements. The report benefitted from inputs from stakeholders in four priority countries, i.e., Nigeria, Kenya, Morocco, and Ghana, through four separate workshops and will be launched on 11th October 2022 at the AFSIC conference.
  • Study on pension fund investment in private equity and private debt in southern Africa: FSD Africa, in partnership with SAVCA, undertook a market study on the pension funds’ investment in the private capital markets. The study aims to facilitate an understanding of the market and the current level of investment by Pension funds in Southern Africa, and how pension fund investments into the asset class by pension funds can be increased. The report was finalised with inputs from various industry stakeholders based on three webinars sessions held for the eight countries considered under the study based on their level of development. The report was disseminated at a webinar held on 7th July 2022
  • AVCA Academy: FSD Africa is working with AVCA to establish the AVCA Training Academy – a digital platform to provide continuous professional development services and training for private equity practitioners. Development of the E-learning Learning Management System was completed and the academy launched in September 2021. Twelve (12) modules have been completed and launched, and an additional ten (10) modules are currently under development. The platform has also incorporated an ESG Training Series.
  • Support for demonstration transactions: FSD Africa is supporting stakeholders in Ghana, Tanzania and Nigeria to co-create funding structures that promote investment by domestic institutional investors in private equity and private debt as asset classes.

Contact

Updated: October, 2022