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Mozambican Entrepreneurs Join $100M AfricaInvest Fund

Mozambican Entrepreneurs Join $100M AfricaInvest Fund

The Confederation of Economic Associations of Mozambique (CTA) and AfricaInvest signed a memorandum of understanding in Maputo on Thursday 24 August to finance small and medium-sized enterprises (SMEs).

This is a line of finance for Mozambican companies to boost investment and promote national content.

AfricaInvest is a private investment fund regulated by the United States of America, which manages 100 million dollars to invest on the African continent, operating in various sectors, particularly agro-industry, real estate, consolidated urban centres and hotels, as well as financial investments in sovereign debt or other types of debt.

The fund’s focus at this stage is on the agriculture, industry, commerce and services sectors and, in addition to Mozambique, it is centred on Angola, Equatorial Guinea and São Tomé and Príncipe.

“As part of this agreement, CTA is responsible for publicising this line and receiving projects for subsequent channelling to AfricaInvest for analysis. The great novelty of this line is that it is very competitive and has volumes of up to one million dollars,” said Agostinho Vuma, president of CTA.

He explained that the launch of the fund comes at a time when CTA obtained approval from the Bank of Mozambique to become Fund Manager of FADE (Business Development Support Fund) last June. “As part of the agreement with AfricaInvest, we undertook to work together to make FADE viable, which has a capitalisation target of 100 million US dollars in two phases. FADE will prioritise investment in companies’ equity stakes,” said Agostinho Vuma.

For his part, Jorge Pais, director of AfricaInvest, explained that “with this fund we have an advantage. For international projects, we have a pre-established network to facilitate access to the markets of European countries and the United States. I therefore believe that this is also an important added value that AfricaInvest can provide.”

As for the sustainability of future projects to be financed, the source said: “We know that risk is inherent in business activity and therefore there is never an absolute guarantee that projects will be successful, but there are market studies, economic studies and indicators that help to give us more confidence in their development. And one of the things we’re looking for is good partners.”

Jorge Pais said that all projects will be analysed, as well as those that CTA will receive and send to AfricaInvest, but the analysis will be done rigorously and conscientiously. “Our involvement in these projects is more significant, taking into account the reality of the Mozambican economic fabric,” he explained.

Funding will be provided on a minimum basis of one million dollars up to 12 million dollars. “These are not absolutely limiting amounts that cannot be exceeded upwards or downwards. As we’re a private organisation, the decision is ours alone, so we feel free to deal with the projects submitted on a case-by-case basis and try to find solutions tailored to what the entrepreneur needs,” said Jorge Pais.

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This is yet another CTA initiative aimed at finding alternative sources of funding. The organisation’s partnership with AfricaInvest is an opportunity to ensure that more national SMEs have access to finance.


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