The European Investment Bank has approved a $10 million investment in Cepheus Growth Capital Partners’ maiden fund, which will invest in Ethiopia’s manufacturing, consumer goods, agriculture and agro-processing sectors.
According to a statement issued by the lending institution, the investment marks EIB’s first backing of an Ethiopia-focused fund.
Cepheus, which was founded last year by Kassy Kebede and Berhane Demissie in Addis Ababa, is looking to raise $100 million for Cepheus Growth Capital Fund. According to the EIB statement, the fund will target investments ranging from $3 million to $10 million in private sector companies across the country with the aim of creating jobs and supporting social improvement.
“With this new initiative the EIB will help Ethiopia, the second-largest country in Africa, to meet key sustainable development goals and continue its recent impressive economic growth,” said EIB’s vice-president Ambroise Fayolle.
According to the World Bank, Ethiopia’s economy has experienced strong and broad-based growth from 2004 to 2015, averaging 10.8 percent per year compared with the regional average of 5.4 percent thanks primarily to the expansion of services and the agricultural sector.
While this is EIB’s first investment in an Ethiopia-focused fund, it is not the bank’s first investment in the country. To date, EIB has invested in Ethiopia’s water infrastructure and has provided credit lines to support private sector investment. It is also considering the backing of off-grid solar investment and financing for renewable energy projects.
Over the past five years, EIB has provided more than €10.1 billion for investment across Africa, the bank said in the statement.