DEG invests in Ethiopia-focused private equity fund

DEG mbH, a European development financial institution, announced on Friday November 9, 2012, that it will be investing 10 million USD into Schulze Global Ethiopia Growth and Transformation Fund. “This investment reinforces DEG’s commitment to making pioneering investments in new frontier markets,” said Bruno Wenn, Chairman of DEG’s Management Board. The Growth and Transformation Fund seeks to deploy USD 1 million up to USD 10 million per investment with a strategy to target Small and Medium Enterprises (SME). “Our company will be celebrating its 50th anniversary soon and our motto for the celebration is “Courage to develop.” We believe that SME’s are the backbone of an economy. They are the most creative segments of a country; they create jobs, and jobs are much needed in Ethiopia,” Bruno stated.
The fund invests in small businesses who have the potential to become industry leaders in Ethiopia. “The fact that DEG wants to invest in Ethiopia is a testimony to Ethiopia’s promise and shows that there are tremendous opportunities in the country,” said Gabriel Schulze, founder of Schulze Global Investments.
“By investing in the Fund, DEG will be among the first foreign investors not only to provide growing private sector businesses with access to much needed capital, but also to highlight Ethiopia as an investment destination,” added Bruno. It was stated at the event that Ethiopian banks rarely undertake risk-based lending. Consequently, many Ethiopian companies, particularly SME’S urgently need access to long term risk capital investment for growth, which the fund will provide.
Global Investments has already invested in four companies that work round the area of education, cement manufacturing, coffee and oil and gas exploration. “What makes our company different from others is that we deal on the basis of one country, one office and one team. We don’t want to have one office for different countries,” said Gabriel.
Schulze Global Ethiopia signed a deal with UK’s development financial institution (CDC) over five months ago. CDC invested USD 15 million. Schulze Global Investments is an emerging markets equity fund firm. It has maintained a professional investment team on the ground, in Ethiopia since 2008, and has transacted a number of private equity investments in the country in recent years.

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