EZDEHAR FUND II

Promoter – Financial Intermediary

SPECIAL PURPOSE ENTITY(IES)/FUND

Location

• Mediterranean Countries

Description

Equity participation of up to USD 15 million in Ezdehar Fund II (the "Fund") - a generalist, closed-ended private equity fund targeting primarily investments in Egyptian small and medium-sized enterprises (SMEs).

Additionality and Impact

Through this operation, the EIB will be able to continue to support the growth and institutionalisation of an independent, local fund manager. Furthermore, the EIB will provide much needed equity risk capital to small and mid-sized enterprises that operate across various economic sectors. Access to finance - in particular equity finance - and managerial advice are among the most prevalent barriers for the growth of small- and mid-sized companies. The provision of growth capital and managerial support through private equity funds has proven an effective strategy to overcome this market failure. By providing growth capital and managerial advice for small and medium-sized companies, the operation will contribute considerably to the priorities of the current agenda for EU-Egypt that emphasises boosting enterprise capabilities and competitiveness through access to finance and improved skills.

Additionally, the EIB is expecting to continuously provide guidance to the fund manager on best market practice for international private equity firms and thus contribute further to the fund manager's institutionalisation. As one of the first development finance institutions ("DFIs") that supported the establishment of the fund manager as a first-time team in 2015 and invested capital in its inaugural fund, the EIB's contribution to the current proposal is expected to represent a statement of confidence in the fund manager's capabilities and thus be highly additional in a difficult fund raising environment that is suffering from the impact of the Covid-19 pandemic.

Objectives

The fund will aim to invest in a diversified portfolio of small and mid-sized companies seeking to grow their activities. The fund manager will proactively support the corporate and operational development of the underlying investee companies.

Sector(s)

• Services - Financial and insurance activities

Proposed EIB finance (Approximate amount)

USD 22 million (EUR 19 million)

Total cost (Approximate amount)

USD 150 million (EUR 126 million)

Environmental aspects

The fund will operate in line with the ElB's environmental and social standards.

Procurement

N/A

Status

Signed - 16/12/2021