(Ecofin Agency) - FMO plans to invest $12.5M in the ARF IV fund managed by XSML Capital, to support SMEs in Central Africa. ARF IV will target SMEs via mixed investments. The FMO is reported to have already committed $107 million in similar commitments so far this year.
The Dutch entrepreneurial development bank, FMO, is considering investing $12.5 million in the African Rivers Fund IV (ARF IV), managed by XSML Capital. The project underscores an ongoing partnership between FMO and XSML, following FMO's previous investments in this African fund, according to data compiled in the Ecofin Pro database.
ARF IV plans to continue using a mix of mezzanine and equity investments to build a diversified portfolio targeting SMEs. With a forecast portfolio of 30 investments and $2 million to $3 million in target commitments, on average, the fund is positioned to make a significant impact in the region.
The fund's main geographical focus includes Angola, the Democratic Republic of Congo, Zambia, and Uganda, countries where SMEs are struggling to access solid financing. The move falls under FMO’s policy to foster economic growth in emerging markets, but also to cultivate lasting relationships with established and competent partners such as XSML.
So far this year, the Dutch public-private lender has already announced almost $107 million in commitments to Africa-focused investment funds.
Since the year began, FMO has been involved in around 20 financing transactions targeting African economies. As a financing player on the continent, it has been involved in almost 200 initiatives as a lead investor or in association with other development finance institutions.