The Board of Directors of the African Development Bank has approved an equity investment of Ksh 1.54 billion (US$15 million) in Catalyst Fund II, a second-generation private equity fund investing in mid-market companies in East Africa.
Building on its successful deployment of Catalyst Fund I, Catalyst Principal Partners, a prominent East African private equity fund, launched Catalyst Fund II with a target size of Ksh 18 billion (US$175 million) in low-income countries, comprising four core East African countries (Kenya, Tanzania, Ethiopia and Uganda), together with Rwanda, Zambia and the Democratic Republic of Congo.
As the anchor investor in Catalyst Fund I, the Bank is considering an equity participation of 8.6% of the second Fund’s capitalisation and an Advisory Committee seat to ensure that transparency, social, environmental and corporate governance best practices are adhered to both at the Fund and portfolio company level.
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Catalyst’s investment strategy is aligned with the Bank’s High 5 priorities: Feed Africa (through investments in food and beverage, and agro-processing companies), Industrialise Africa (through investments in manufacturing companies), Integrate Africa (through investments in businesses that cater to the East African regional economies), and Improve the quality of life of the people of Africa (through investments in hospital, clinics, pharmaceutical companies and the financial services sector).
The Fund’s strategy is also well aligned with the Bank’s Ten Year Strategy (2013-2022), focusing on regional integration and economic growth through industrialization, in order to achieve green growth and sustainable development in the Bank’s Regional Member Countries
