SDG Frontier Fund Final Closing
First-of-its-kind Belgian impact fund mobilises additional private resources to support African and Asian SMEs in their growth.
The SDG Frontier Fund, set up at the initiative of BIO, the Belgian Investment Company for Developing Countries, has reached its final closing for a total fund size of EUR 36 million, thanks to the participation of four additional Belgian private investors, including Ghent University and Ethias. The fund aims to support sustainable economic growth in African and Asian frontier markets and to offer an attractive financial return.
SDG Frontier Fund
The SDG Frontier Fund is a self-managed co-investment vehicle that invests jointly with BIO in private equity funds operating in Africa and Asia. The Fund is a BIO initiative and also draws on BIO's extensive expertise of 20 years. The SDG Frontier Fund aims to invest in 10 to 12 funds, which in turn will invest in a dozen local small and medium-sized enterprises (SMEs). In this way, more than a hundred SMEs will receive support from the fund. This investment fund is the first of its kind in Belgium and offers a unique counter-cyclical opportunity to diversify an investor's portfolio.
The Fund operates as an "impact fund", meaning that it seeks to generate significant and measurable beneficial development impact combined with financial return. The Fund also contributes to the implementation of the Sustainable Development Goals (“SDG”). Compliance with international environmental, social and governance standards by the portfolio funds and their local investees is an integral part of the investment policy. The SDG Frontier Fund is a concrete example of how a fund can work as a catalyst to mobilise private funds for developing countries.
Two years after its creation, the SDG Frontier Fund already participates in eight funds active in Asia and Africa. Here are some examples of companies that have already received indirect support from the SDG Frontier Fund:
- A printing business in Kinshasa, DRC, that needed new printing machines to expand its activities;
- A B2B online platform in India allowing grocery stores and restaurants to buy directly from local farmers;
- A South-African agritech company enabling tree and fruit farmers not only to monitor their crops but also to increase their overall yield through satellite and drone imagery;
- A hospital business specialising in stroke treatment in Vietnam expanding to the country’s currently underserved more remote provinces.
For its second closing, the fund was able to count on four additional investors, including Ghent University for 5 million euros and Ethias for 2.5 million euros. They join the prominent investors of the first closing, which include AG Insurance, Belfius Insurance, the Koning Boudewijn Stichting, Volksvermogen and VDK Bank.
This investment is part of our general investment policy in which we strive for a sustainable and climate-friendly transition of society, with special attention to people in a situation of social exclusion.
Joris Laenen, Chief Investment & Life Officer Ethias
Rik Van de Walle, the rector of Ghent University, explains how the SDG Frontier Fund fully fits into the university's integrally sustainable and socially responsible investment portfolio: In anticipation of using its liquid assets for research and/or infrastructure projects, Ghent University invests them in a sustainable manner. Here, we emphasise climate-friendly investments, for example, by explicitly excluding the fossil fuel sector (fossil fuel divestment) and by actively investing in renewable energy sources. The cooperation with BIO and participation in the SDG Frontier Fund offer us the opportunity to help realise this ambition in a number of developing countries.
Joris Laenen, Chief Investment & Life Officer: This investment is part of our general investment policy in which we strive for a sustainable and climate-friendly transition of society, with special attention to people in a situation of social exclusion. Just like the SDG Frontier Fund, Ethias chose the fight against poverty (SDG1) as one of its focal points in the transition to a fairer society, so this partnership was a logical step.
According to a World Bank report (October 2021), the drop in incomes due to the pandemic was translated into a sharp increase in global poverty. The SDG Frontier Fund plays an even more important role in this context with the implementation of the Sustainable Development Goals.
The SDG Frontier Fund will, for the next 10 years, support local SMEs and provide opportunities to a large number of men and women by creating new jobs.
Finally, the SDG Frontier Fund responds to the growing demand of more and more investors: the desire that their investments generate a development impact in addition to a financial return.
The SDG Frontier Fund is a concrete example of how a fund can work as a catalyst to mobilise private funds for developing countries.
With more than 49,000 students and 9,000 employees, Ghent University is one of the largest universities in Belgium. The eleven faculties offer more than 200-degree programs and conduct research in various scientific disciplines. Under the credo 'Dare to Think', Ghent University challenges everyone to take a critical view of society. As a pluralistic university, Ghent University is open to everyone regardless of ideological, political, cultural or social background. Ghent University has campuses in and around Ghent, in Kortrijk, Ostend and Bruges, and with its Ghent University Global Campus, it is the first European university in Songdo, South Korea.
Jeroen Vanden Berghe, logistics manager
Ethias' unique business model is based on the direct, digital and public sectors, on the commitment of its 1,900 employees, on the trust of its customers (1,200,000 private individuals and more than 40,000 public and private sector customers), on the support of its shareholders, on its 100 years of experience and on its financial strength. All this makes Ethias today a remarkable Belgian insurer. Based on a solid group strategy, Ethias constantly innovates with a view to value creation and with an eye on the needs of tomorrow. Its innovations are implemented via ecosystems in areas such as health, ageing, mobility and public services. With its "phygital" and socially responsible approach, Ethias wants to be a partner in daily life, going beyond insurance and being accessible to everyone.
Serge Jacobs, Spokesperson
+32 475 98 31 37
SDG Frontier Fund
Equity € 7,212,033.79 (2022)Sub-Saharan Africa, Kenya, Nigeria
Equity € 2,500,000.00 (2022)Sub-Saharan Africa, Burkina Faso, Côte d'Ivoire, Ghana, Kenya, Mali, Nigeria, Senegal
Equity € 3,200,000.00 (2022)Middle East & North Africa, Sub-Saharan Africa
Equity € 1,700,000.00 (2021)Middle East & North Africa, Egypt
Equity € 6,330,000.00 (2020)Asia, Latin America and Caribbean, Middle East & North Africa, Sub-Saharan Africa
Equity € 4,000,000.00 (2021)Middle East & North Africa, Egypt, Sub-Saharan Africa, Kenya, Nigeria, South Africa
Equity € 2,000,000.00 (2021)Asia, India
Equity € 2,300,000.00 (2020)Sub-Saharan Africa, Ethiopia, Kenya, Rwanda, Tanzania, Uganda
Equity € 1,500,000.00 (2020)Sub-Saharan Africa, Democratic Republic of Congo, Uganda
Equity € 2,000,000.00 (2020)Asia, Vietnam
Equity € 2,000,000.00 (2020)Asia, Bangladesh, India
BIO has invested INR 650 M in Northern Arc Impact India Fund (NAIIF), the eighth fund of Northern Arc Investments Managers (NAIM), one of the leading private debt fund managers from India. The investment will be used to support and address the funding gaps for impact enterprises (IE) through easy, reliable, and sustainable access to finance.
The European Investment Bank (EIB) and nine European bilateral DFIs replenish the existing joint financing facility - the European Financing Partners (EFP) - to scale up their Team Europe contribution over the next three years.
Oikocredit and Investisseurs & Partenaires, with support from lenders BIO Invest and EDFI AgriFI, invest EUR 12.2 M in Agroserv.
Oikocredit and I&P take equity stakes in agro-processor Agroserv in Burkina Faso
The social-impact company will develop a new processing plant, diversify products, and support more smallholder farmers and households