AfricaConnect provides financing support on attractive terms to European companies in both their existing and planned activities in Africa. It promotes and facilitates local investments in a targeted manner, offering tailored financing solutions without red tape.
At a glance: AfricaConnect
- Loans for almost all African markets in EUR, USD as well as in selected local currencies
- Direct disbursement to the African subsidiary (without detour over your house bank)
- True risk sharing: You provide the equity we provide the debt financing (usually without guarantee by the parent company)
- A single point of contact: Financing supplemented by technical assistance for training programmes, E&S risk assessment etc.
- Use of the DEG network and long-term experience in structuring and implementing investments in Africa
Who are we financing?
- Subsidiaries of European companies already active in Africa or planning to enter the market
- African companies holding long-term business relationships with European companies
Moreover, financing is only possible if
- the company is profitable and can service the loan from its operating activities
- the investment generates local value, e.g., job creation, market innovation
The AfricaConnect investment financing facitily is not eligible for
- Companies without a profitable business model and sufficient equity
- Companies wishing to restructure or redeem existing loans or use the funds to distribute profits or pay dividends
- Projects without a proof of concept
At what conditions?
- Repayable loan of EUR 0.75 million up to 5 million *
- Tenor up to 7 years with optional grace period
- EUR, USD and selected local currencies
- Risk-oriented equity contribution of 20% to 50%
- Attractive, risk-oriented conditions: 1% to 7% EUR interest p.a.
* Subject to availability of funds and positive risk assessment
Which information do we need from you?
- A company profile
- The last two audited financial statements of the parent company and subsidiary
- A qualitative and quantitative business plan demonstrating a positive outlook for the coming years
- An organizational chart showing the corporate structure of the company and the group
- A description of the developmental effects of the investment, especially the number of new jobs
Why was AfricaConnect established?
Many of Africa’s national economies have enjoyed rapid growth in recent years. They are among the fastest-growing markets worldwide, with rising purchasing power and a large and expanding middle class. In coming decades the African economy has the potential to become the largest economic growth driver worldwide, due in part to the formation of the world’s largest free trade area (AfCFTA).
Driven by its very young and increasingly well-educated population, coupled with rapidly advancing digital transformation, sizeable and, as yet, unsaturated markets are developing in Africa. This is leading to numerous opportunities for German and other European companies as well.
The (“CwA”) was initiated under the German G-20 Presidency in 2017, with the objective of enhancing economic cooperation with reform-minded African nations. The Development Investment Fund (EIF) of the German Federal Ministry for Economic Cooperation and Development (BMZ) is part of Germany’s programme of support for the CwA.
AfricaConnect forms part of the EIF and is being implemented by DEG. While AfricaConnect thus has a focus on projects in CwA countries, worthwhile development initiatives in other African countries may also be financed.