CEPHEUS ETHIOPIA SME FUND

Promoter – Financial Intermediary

SPECIAL PURPOSE ENTITY(IES)/FUND

Location

• Ethiopia

Description

Cepheus is a local Ethiopian fund manager launching its first fund focused on Ethiopia where the private equity industry is nascent. The fund is incorporated in Mauritius and will focus on providing growth capital for Ethiopian small and medium-sized enterprises (SMEs) with a focus on strong job creation and sustainable financial returns. The significant job creation will impact the root causes of the migration crisis in this frontier country. The operation is EIB's first fund investment in Ethiopia, supporting a first-time manager with a focus on generating superior developmental returns.

Objectives

The proposed operation concerns a participation in Cepheus Growth Capital Fund, a closed-end growth equity fund with a target size of USD 100m. The fund will be set up to make privately negotiated equity and equity-related investments in SMEs in Ethiopia. With a generalist approach in terms of sectors, the fund will support local companies in need of growth financing with strong job creation focus. Its main objective consists in acquiring significant minority stakes in businesses with a strong growth potential. The manager will seek to create value through a hands-on management approach, driving the growth and profitability of investee companies and enhancing enterprise skills, governance as well as environmental and social standards.

Sector(s)

• Services - Financial and insurance activities

Proposed EIB finance (Approximate amount)

USD 10 million (EUR 8 million)

Total cost (Approximate amount)

USD 100 million (EUR 84 million)

Environmental aspects

The fund's operational guidelines provide for environmental and social due diligence of investee companies according to guidelines acceptable to the Bank.

Procurement

Not applicable

Status

Signed - 23/11/2017