African Rivers Fund III

Equity : September 2020

The SDG Frontier Fund has invested USD 1.7 M in equity in the African Rivers Fund III, an SME fund which invests in small and medium-sized enterprises in Central and Eastern Africa.

This is an investment by SDG Frontier Fund

Amount

$ 1,700,000.00

Type of investment

Equity

Development impacts

Local economic growth
Private sector consolidation/innovation
Promotion of ESG best practices

Beneficiary locations

Africa: Democratic Republic of Congo, Uganda

Investment field

Investment Companies & Funds

Activity

SME Fund

Organisation

African Rivers Fund III

Website

https://xsmlcapital.com/

More investments in

African Rivers Fund III

Equity € 6,113,520.00 (2020)

ARF III is XSML’s third fund under management, after its maiden fund the Central Africa SME Fund (CASF) and its second fund, African Rivers Fund (ARF), bringing total assets under management to USD 120 million.

ARF III targets growing, well-managed small and medium-sized enterprises (SMEs) in the Central African region covering Angola, the Democratic Republic of Congo (DRC), Uganda and the Republic of Congo and surrounding countries. The fund is named after the two most powerful rivers in Africa, the Congo and Nile Rivers, which embody the potential of the Central and East African region. ARF III follows the successful investment strategy of its predecessor funds, CASF and ARF, by providing debt, equity and mezzanine finance to fast-growing companies in these regions.

The private sector in DR Congo and Uganda, our core markets, as well as Angola, our new third home market, has tremendous growth potential and long-term capital remains scarce.

Jarl Heijstee, Managing Partner at XSML

Development impacts

Local economic growth
The fund provides long-term finance to SMEs as a combination of debt and equity, with an expected ticket size between $ 250,000 and $ 7.5m and a tenor around 5 years. The fund operates in markets where banks' lending to SMEs is very limited and where only very few private equity funds are active. The fund can help proving the viability of financing SMEs and can help them attract additional finance once they have grown in size and have a proven track record.
Private sector consolidation/innovation
ARF III is one of very few funds active in the target region and the only PE fund with an office in DRC. The fund offers mezzanine finance to SMEs which are largely underserved by local banks and therefore provide flexible, long-term finance that is crucially needed.

XSML is currently one of very few PE funds in Central Africa, and the only one with a presence in DRC, with limited or no competition in most markets. The team has gained experience through 2 predecessor funds and will expand the local presence after the closing of ARF III.

The fund manager will help institutionalizing the portfolio companies in terms of reporting, information systems, financial management and governance. The team has experience in advising SME and will act as a partner in order to improve management and governance at the level of the investee companies. In the previous funds, the manager has helped to build strategic alliances, advised on strategy and business development and has organized trainings at investee companies.
Promotion of ESG best practices
The fund manager has a good E&S management system in place, provides ESG training to all its investment managers and works with several E&S consultants to assess the portfolio companies and to develop E&S action plans.

Other investments by

SDG Frontier Fund

Navis Asia Credit Fund LP (Equity) $ 5,000,000.00 (2024)
Omnivore Agritech & Climate Sustainability Fund III (Equity) $ 3,500,000.00 (2023)
TIDE Africa II Fund (Equity) $ 2,500,000.00 (2022)
Uhuru Growth Fund I-A SCP (Equity) $ 2,500,000.00 (2022)
AfricInvest Financial Inclusion Vehicle (Equity) € 3,200,000.00 (2022)
Ezdehar Mid-Cap Fund II (Equity) $ 1,700,000.00 (2021)
Cathay Africinvest Innovation Fund (Equity) € 4,000,000.00 (2021)
Incofin India Progress Fund (Equity) € 3,500,000.00 (2021)
Ascent Rift Valley Fund II (Equity) $ 4,000,000.00 (2020)
Excelsior Capital Vietnam Partners (Equity) $ 2,200,000.00 (2020)
South Asia Growth Fund II (Equity) $ 2,200,000.00 (2020)

Made possible through this investment

Thanks to the direct funding from BIO, the following second-line investments have been made possible.

Afrovision

Democratic Republic of Congo

Retail and wholesale of activewear.

Baj Petrol Stations

Uganda

Fuel retailing (petrol, diesel & kerosene).

Bonnen Cuisine

Uganda

Retail – food & beverage kiosks in petrol stations

Bricokin

Democratic Republic of Congo

Wholesale and retail of construction material, hardware equipment and tools.

Coffeelac

Democratic Republic of Congo

Coffee processing and export company.

CPS

Democratic Republic of Congo

Street parking bays.

DPXL

Democratic Republic of Congo

Communication services and production of interior and exterior signage

DT Bags

Uganda

Wholesale distributor of bags (school, travel, lady, etc.)

DT Logistics

Uganda

Outsourcing of trucks park

Ecopharm

Uganda

Retail pharmacy chain company that was founded in 2003, operating 15+ branches in Kampala, Uganda.

ETS Orange

Democratic Republic of Congo

Wholesaler in computer hardware, IT consumables, cell phones and office furniture

Fawaz Trading

Democratic Republic of Congo

Company trading electronic, lighting, UPS products, electrical cables, and renewable energy products out of Kinshasa.

Gecotrans

Democratic Republic of Congo

Logistics company that offers custom brokerage, transshipment and warehousing services.

Geek SARL

Democratic Republic of Congo

Engineering company specialized in technical consulting

Maison Galaxy

Democratic Republic of Congo

Consumer goods and cosmetics retailer with several stores in Congo, DR.

MCS Group

Angola

Telecom infrastructure equipment and its preparation

Médecins de Nuits (MDN)

Democratic Republic of Congo

Group of healthcare clinics in DRC, providing emergency, regular healthcare and surgical procedures.

Neil & Spector Healthcare Ltd

Uganda

Wholesale distributor of medical consumables

Nova Technologies

Democratic Republic of Congo

Civil engineering services in IT and Energy (optical fibres and telecom towers)

NRJ Distribution

Democratic Republic of Congo

One of the largest trucking companies in DRC that counts with a fleet of trucks, trailers and elevator tractors. The company is specialized in the transport of cement, mined materials, fuel, logs and other conventional freight, as well as rental services.

Premier World

Uganda

IATA certified travel agency providing air ticketing.

Prime Concept

Uganda

Manufacturer of corrugated carton boxes for packaging, storage and transportation in Uganda.

Quickprint

Democratic Republic of Congo

Established in 2014, Quickprint is a digital printing shop in Gombe, Kinshasa and offers modern printing solutions for corporates, NGOs and SMEs in the area.

Ranchers Finest

Uganda

Food production

Selton hotel

Democratic Republic of Congo

Mid-range business hotel

Shayna

Angola

Retail of consumer goods and cosmetics

Simba Telcom

Uganda

Re-seller of e-airtime, MTN sim cards, phone related electronics and e-wallet.

SINDCO

Democratic Republic of Congo

Manufacturer of PET preforms for breweries and water bottling companies.

Sokoni

Uganda

Business group active in the hospitality industry as well as real estate market.

Tal Medical And Rescue International (TMR)

Uganda

TMR International Hospital offers healthcare services such as maternity care, pedeatrics, cardiology, emergency services and others in Uganda.

Unicomplex

Democratic Republic of Congo

Company specialised in sales of generators and spare parts and installation, maintenance and repair services.

Zuri

Democratic Republic of Congo

Sale of premium women hair extensions and cosmetics.

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