In 2009, AFD Group set up the FISEA facility with the objective of promoting economic growth and the creation of start-ups and MSMEs on the continent. As the initial investment capacity of EUR 250m had been fully invested at the end of 2019, a new facility, FISEA+, took over in early 2021 under the Choose Africa initiative. With an investment capacity of EUR 210m and a technical assistance budget of EUR 21m, FISEA+ will continue to support businesses, either directly or via investment funds. The European Union has also been providing financial support since 2022, through guarantee and technical support programs.
FISEA+ is innovative in that it takes into account changes in needs and the market, by integrating specific investment objectives for fragile countries, social and solidarity-based enterprises and SMEs that provide essential goods and services via digital innovation. FISEA+ should allow African MSMEs to find long-term financing to overcome the crisis and restart their businesses. In this respect, it fits in with the Choose Africa Resilience component deployed by AFD Group.
Providing scope for operations complementary to PROPARCO’s operations
The investment philosophy of FISEA+ is to continue to support the fabric of African MSMEs and look for projects with increased impacts whose eligibility criteria are complementary to AFD Group’s other instruments, and in particular PROPARCO’s balance sheet.
FISEA+ may invest a limited amount in funds with longer lifespans (15 years) or venture capital funds positioned on pre-seed or seed capital (when PROPARCO’s balance sheet covers more A, B and C series). FISEA+ may also support initiatives that can benefit from junior tranches in addition to senior tranches. These junior tranches aim to encourage established managers to develop in new strategies and geographical areas, while seeking to mobilize more capital in these new thematic areas, particularly in the Priority Poor Countries and West Africa, with an increased effort in French-speaking areas.
Technical assistance to meet business challenges
The Technical Assistance (TA) provided for under FISEA+ aims to provide expertise and know-how tailored to the needs of fund managers and MSMEs, via three types of project: “Responsibility”, “Performance”, and “Impact”.
The TA provides a response to issues related to the expertise and/or transformation of businesses in order to:
- Improve their management methods and promote the adoption of sustainable and responsible practices,
- Support their growth,
- Strengthen their long-term performance,
- Produce more positive impacts on development.
The promotion/training for Environmental & Social (E&S) risk management, the climate, gender equality and impact measurement, which are strategic issues for AFD Group, is a priority for the FISEA+ TA, as well as the creation of exchanges in the network set up by FISEA to have a wider impact on the ecosystem.
FISEA + initiative strengthened
In February 2022, on the occasion of the 7th edition of the EU-Africa Business Forum (EABF) and on the sidelines of the EU-AU Summit, the European Commission and the Agence Française de Développement Group signed a 35 million euro guarantee agreement in favor of FISEA+, the AFD Group facility implemented by Proparco as part of the Choose Africa initiative.
FISEA+ is an initiative launched in 2021 that invests in high-impact funds that address 4 key strategic priorities: support for SMEs, the emergence of social and solidarity-based enterprises, the development of a sustainable private sector in fragile countries, and support for start-ups specializing in digital innovation.
The European Commission’s support for FISEA+ will make it less risky for potential investors to invest in high-impact funds in Africa. The technical support component of FISEA+, also made possible by the EC’s financial support (5 million euros), will maximize the impact of these funds on the continent.
This EU support is part of the European Union’s Investing in Young Businesses in Africa (IYBA) initiative.
10 years of impact for FISEA
FISEA operated between 2009 and 2019 and signed over EUR 270m of investments for 11 companies and 32 investment funds, which indirectly supported over 800 companies in 35 African countries. FISEA thereby contributed to creating or maintaining over 140,000 direct jobs, including 37% for women’s jobs, and 345,000 indirect jobs.