AGF partners GuarantCo to provide $74m infrastructural fund for SMEs

The African Guarantee Fund for Small and Medium-Sized Enterprises (AGF) has entered into a re-guarantee transaction agreement with GuarantCo to provide $74 million infrastructural fund to small and medium scale business operators in the sector in Af

With the increase guarantee capacity for SME financing, AGF will be able to support larger local currency transactions for SMEs involved in infrastructure, AGF says in a release made available to BusinessDay.
The firm says strengthening Africa’s infrastructure is critical for development on the continent, adding that it will continue to support SMEs involved in infrastructural development with funding to drive growth.

“AGF is glad to be joined by GuarantCo in bridging the infrastructure financing gap. This partnership aims to put in place an even stronger collaboration that will work on the entire value chain of infrastructure projects in Africa. We are looking forward to supporting other SMEs that work with key players in the infrastructure sector,” Felix BIKPO, chief executive officer,” AGF says.
Over the past six years, AGF has led the guarantee market in Africa by issuing financial guarantees to a tune of $690 million.  This has enabled its partner financial institutions to issue loans estimated at $729 million to about 7,600 SMEs in Africa.

Commenting on the GuarantCo and AGF partnership, Lasitha Perera, chief executive officer says, “We are delighted to be able to partner with the African Guarantee Fund and increase support to SMEs active in the infrastructure sector in Africa.”

“This collaboration between two local currency focussed guarantors offers the potential for us to engage local financial institutions and investors in financing the entire value chain in an African infrastructure project,” Perera says.

GuarantCo is part of the Private Infrastructure Development Group, (PIDG), and is a global guarantee fund that has issued over $900 million of guarantees since inception in 2005 with a mandate to enable local currency finance for infrastructure.

The transaction will enable AGF and GuarantCo to explore further partnership opportunities of working together in contributing towards economic growth in Africa.

Josephine Okojie