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Capital Markets

PE fund to invest Sh535m in Kenya agribusiness SMEs

Cyprus-based private equity firm Vital Capital will invest up to Sh535 million in small and medium agribusiness enterprises in Kenya
Cyprus-based private equity firm Vital Capital will invest up to Sh535 million in small and medium agribusiness enterprises in Kenya. FILE PHOTO | NMG 

Cyprus-based private equity firm Vital Capital will invest up to Sh535 million in small and medium agribusiness enterprises in Kenya in partnership with the US government’s Kenya Investment Mechanism (KIM) that was set up to help firms affected by the Covid-19 pandemic.

Vital Capital managing partner Nimrod Gerber said that the firm was looking to create at least 500 jobs through this investment, whose funds will be drawn from its Sh1 billion Vital Impact Relief Facility (VIRF).

The investment will enable local firms to strengthen their farm-to-market value chains to maximise returns and reduce losses.

“Vital Capital and KIM are seeking to identify and execute at least five completed transactions, providing at least Sh500 million in financing, to alleviate the strain of Covid-19 on impactful Kenyan businesses thereby sustaining 500 jobs,” he said.

“We believe this collaboration has the potential to effect real change and support smallholder farmers survive the worst ravages of the Covid-related economic crisis.”

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KIM chief of party Roger Bird said USAID will utilise its vast knowledge on a case by case basis to inform decisions made on Vital Capital partnership and funds’ injection.

The Vital Capital-KIM collaboration will entail identification of potential opportunities in KIM’s pipeline where KIM’s network of transaction advisors will facilitate the transactions leading to a close under Vital Capital’s investment committee.

Vital Capital has hired Guido Boysen, a former chief executive of SME lender Grofin to spearhead the investment programme, saying it will utilise his vast experience in creating and managing targeted debt facilities in Africa to co-lead the new business.

Founded in 2011, Vital Capital focuses on SME investments in sub-Saharan Africa that benefit millions of people in low and middle-income communities.

It manages Sh35 billion under its Vital Capital Fund as well as the new debt facility.

KIM is a five-year programme that is funded by the US Agency for International Development (USAID) to mobilise up to Sh42.8 billion in investments towards key sectors including agriculture, which have faced challenges in accessing finance and market access.

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