2018 is an exciting year for the Africa Enterprise Challenge Fund (AECF) as we mark our 10th anniversary.
To celebrate this milestone, AECF will organise a number of activities in the first half of the year to appreciate the investees, our development partners and industry stakeholders for staying the course with us on this journey that began with enthusiasm, faith and an initial funding commitment of US $35 million. The fund has grown year on year and now we stand at US $310 million, taking us to 24 countries and showcasing the private sector’s role in promoting sustainable development and improving livelihoods in rural communities in Africa.
Taking stock of 2017
Last year was a big year for AECF! 2017 was our first year functioning as an independent institution, inheriting the last of the responsibilities from the former Fund Manager, KPMG, and from our parent, AGRA - completing a transition that was initiated in 2014. As a new organisation we inherited a portfolio of 257 businesses, a fund size of US $256 million, relationships with eight development partners and responsibility to preserve a strong legacy for development impact. This meant that we needed to quickly establish ourselves - setting up our head office in Kenya, regional offices in Zimbabwe and Tanzania and conducting a massive drive to recruit staff. We currently have 38 staff members of 9 different nationalities the majority of whom joined the program during 2017.
During the year The AECF launched its first competition as a new entity – Renewable Energy and Adaptation to Climate Technologies Household Solar (REACT HS) targeting four African countries, with funding support from the United Kingdom's Department for International Development (DFID). The competition received 74 applications of which 10 companies are being currently contracted. Towards the end of the year, The AECF signed a funding agreement with the Swedish International Development Agency (Sida) worth US $48 million to fund renewable energy companies in seven countries in sub-Saharan Africa. This was the largest single investment made by a donor partner in the Fund’s history and a heartening vote of confidence in the “new” AECF.
In 2018, we will continue this momentum and are anticipating an even bigger year, with the roll-out of our new strategy and a celebration of The AECF’s legacy over the past ten years. The new three-year strategy is ambitious – looking to double our impact to date in just three years, to increase our fund size to half a billion dollars, and expand our geographical footprint across the Continent, notably into Francophone and Lusophone Africa. Using a blended finance approach, we will refocus on providing added value to our stakeholders through targeted and more inclusive development impact on women, youth and the creation of sustainable jobs and incomes. This is very ambitious but also doable.
Over the past ten years The AECF has been instrumental in providing financing to SMEs that would otherwise not qualify for funding from conventional financial institutions. To continue this legacy, this year we plan to launch at least four new programmes within our two sectors – agribusiness and renewable energy - targeting youth, women and seed companies as well as piloting the use of our challenge fund approaches in the refugee and humanitarian contexts.
As an organisation, The AECF takes pride in our legacy and the impact we have made to date transforming the lives of rural communities in Africa. This has been made possible by our investees, our development partners and The AECF staff. We invite you to continue with us on this exciting journey in 2018.
Dr. Paul Greener, CEO, The AECF