Development finance institution (DFI) the African Development Bank (AfDB) has approved an $11-million equity investment in BluePeak Private Capital Fund toward its $155-million target for final close.

The investment advances the AfDB's goal of supporting mid-size firms, including in the pharmaceuticals, agribusiness, manufacturing and logistics sectors across Africa, as BluePeak will provide growth capital to medium-sized companies, with the potential to become pan-African market leaders.

The BluePeak Private Capital Fund is aimed at adding value to portfolio companies by enabling their expansion, recapitalisation and deleveraging. It is expected to make at least eight investments of $8-million to $25-million in companies with established cash flow generation.

The AfDB equity investment is expected to contribute to the creation of 1 142 full-time jobs, and support the construction of 6 400 telecommunication towers and an increase in the production of malaria drugs from 33-million units in 2022 to 75-million units in 2027.

As seven of the portfolio firms operate in rural areas, the investment will also serve women and other vulnerable members of communities, particularly in agribusiness, the AfDB said.

Further, BluePeak’s current pipeline of investments comprises 22% agri-business, 22% manufacturing and packaging, 12% pharmaceuticals, 12% fintech and financial services, and 11% each in information technology and telecommunication, logistics and commercial real estate.

BluePeak is also expected to attract investment from other DFIs.

“The AfDB equity investment promises several benefits, and will ensure the fund’s adherence to the best standards. By investing in BluePeak, the AfDB will support an indigenous fund manager with a strong knowledge of African markets to invest in underserved small and mid-size companies. Fund managers have identified investment opportunities across Africa in more than 15 countries,” it said.

The BluePeak Fund investment strategy is aligned with the AfDB's High 5 priorities, particularly to industrialise Africa, improve the quality of life for the people of Africa and feed Africa, it added.

The equity investment will contribute to integrating Africa at the continental and the regional levels through private sector promotion. The investment is also in line with the AfDB's priorities for the development of the private sector through support for small and medium-sized enterprises.

Additionally, the investment will also advance its strategy to develop Africa’s pharmaceutical manufacturing capabilities continent-wide.

“The commitment of the AfDB to our flagship fund is a strong sign of confidence in our strategy of supporting impactful businesses in Africa. Small and medium-sized enterprises in Africa are still facing financing challenges as a result of several macroeconomic setbacks. BluePeak was founded to fill part of this financing gap,” said BluePeak Private Capital co-founder Walid Cherif.