October 15, 2021

By Lynda Kiernan, Global AgInvesting Media

The British impact investor and development finance company CDC Group announced its investment of $100 million in African Development Partners III (ADP III), leading the fund to close at $900 million, making it one of the largest funds dedicated to investment on the continent. 

Advised by Development Partners International (DPI), the fund is a top pan-African private equity vehicle targeting innovation-led medium-and-large-sized companies that are transforming critical sectors such as agriculture and healthcare.

The capital accessed through this fund will deliver on an array of factors, including enhancing the range of goods and services available to the middle class, job creation, economic diversification, market expansion, and the funding of essential services through corporate taxes to foster growth continent-wide. 

As part of its mission, the fund also will be contributing toward UN Sustainable Development Goals (SDGs) 3,5, and 8, in particular – encompassing good health and wellbeing, gender equality, and improved economic opportunity through direct and indirect job creation.

“We are pleased by DPI’s rigorous and focused ability to provide targeted support to investees in sectors that serve the continent’s growing middle class,” said John Owers, head of mid/large funds, CDC Group.

“Our commitment to ADP III demonstrates our confidence that DPI’s third fund presents an opportunity to make investments that help to maximise both commercial and impact outcomes across the continent,” he continued. “We are thrilled that our patient and long-term capital will facilitate increased access to goods and services, and create lasting jobs that will continue to energise Africa’s growth.”

The scale of this commitment by CDC reflects its confidence in DPI’s hands-on approach when generating value creation, and the fund’s dedication to ESG and development impacts as it integrates gender lens investing and climate change into its investment mandate by developing tools to assess climate-related risks and opportunities in their investments.

DPI has also trained its investment teams on opportunity-led gender finance, and has implemented fitting safeguarding measures within the fund and across its portfolio. These strides in improving economic opportunities for women have been recognized, with the fund being named as the first 2X Flagship fund as part of the global 2X Challenge.

Large Scale of Late

This is the second $100 million investment made by CDC Group in a matter of months. In May 2021 the group announced one of its largest debt investments in its history when it committed $100 million to ETG Group in support of farmers across Africa and Asia. 

This investment was not only one of the largest in CDC history, but it represents a long-term partnership that is a testament to the catalytic role that agriculture and rural development play as Africa embarks on its next phase of growth in the coming decade. It also contributes to supporting UN Sustainable Development Goals (SDG) 2 (zero hunger) and 8 (decent work and economic growth).

Working within a two-way logistics model, ETG drops fertilizers at the farmgate, which are used to improve the quality of crops, then picks up produce from farmers to sell on the global market. ETG also provides warehousing and establishes distribution centers, giving farmers the flexibility to store their produce until an optimum time to sell – raising their income potential.

ETG has long-standing relationships with more than 550,000 smallholders, who also benefit from training, expert farming support, and mechanization, which all result in higher yields and improved livelihoods, while ETG’s agronomists mentor farmers on production of high-margin cash crops and the implementation of crop rotation for year-round stability.

This debt commitment acts to support the growth of ETG’s food and agriculture business and to strengthen its food value chains by expanding its logistics networks, thereby boosting agricultural yields and the production of staples crops including grains, rice, and cocoa.

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.