AfDB Approves $15M Investment to Boost African SMEs Through AEF 1 Fund

The decision, taken by the Bank’s Board of Directors in Abidjan on 19 November 2025, underscores the Bank’s strategic commitment to strengthening the private sector—widely recognized as the continent’s most powerful engine of job creation and sustainable growth.

The African Development Bank Group (AfDB) has approved a $15 million equity investment in the Adenia Entrepreneurial Fund 1 (AEF 1), a major financing initiative designed to scale small- and mid-cap companies across Africa and deepen regional economic resilience. The decision, taken by the Bank’s Board of Directors in Abidjan on 19 November 2025, underscores the Bank’s strategic commitment to strengthening the private sector—widely recognized as the continent’s most powerful engine of job creation and sustainable growth.

The new investment will allow AEF 1 to expand growth capital to high-potential African firms operating in critical, resilience-building sectors such as light industry, renewable energy, consumer goods and services, health, and education. These sectors were selected for their ability to stimulate inclusive development, strengthen value chains, and support Africa’s long-term economic transformation.

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Unlocking Growth for Africa’s Emerging Enterprises

AEF 1 targets small- to mid-cap companies, which often struggle to access flexible, long-term financing despite their central role in employment and industrial development. The Fund will acquire majority equity stakes in its portfolio companies, enabling it to lead operational restructuring, introduce good management practices, and position firms for accelerated growth.

This hands-on approach is key to improving company performance and competitiveness, especially in environments where firms face barriers such as limited access to capital, regulatory challenges, and supply chain disruptions.

Adenia Partners, the manager of AEF 1, will support companies in:

• Designing and executing strategic growth plans

• Enhancing governance and management systems

• Improving productivity and operational efficiency

• Accessing sector specialists and technical assistance

• Expanding to new regional markets

This support is expected to drive sustainable profitability and ensure companies are positioned for long-term resilience.

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Strong Development Impact: Jobs, Integration and Tax Revenue

According to AfDB estimates, the AEF 1 Fund will generate substantial socioeconomic benefits across its lifetime, including:

• 1,810 new full-time-equivalent jobs, with 45% of positions for women and 55% for youth

• $55.5 million in tax revenue for African governments

• Strengthened regional integration, as the Fund prioritizes firms with cross-border operations or the potential to grow into regional players

By scaling mid-sized firms, the Fund will help diversify economies, boost intra-African trade, and build more resilient supply chains—objectives that align closely with the African Continental Free Trade Area (AfCFTA) agenda.

“By targeting small- to mid-cap companies, AEF 1 will contribute to inclusive growth by facilitating access to finance for these businesses and promoting the creation of sustainable jobs,” said Ousmane Fall, Acting Director of the Industrial and Trade Development Department at the AfDB.

He added, “The Fund will also strengthen regional integration by investing in companies operating on a regional scale and supporting them as they expand beyond their home markets.”

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Why This Investment Matters

Small and mid-sized companies account for up to 90% of businesses in Africa and employ more than 60% of the workforce, yet they face consistent financing gaps estimated at over $330 billion, according to various industry reports. AEF 1’s focus on mid-cap companies addresses an often-overlooked segment that is too large for microfinance but too small or risky for commercial lenders.

By expanding the pool of growth capital, AfDB’s investment will:

• Unlock private sector potential across industries

• Support economic diversification

• Incentivize innovation and technology adoption

• Drive green and inclusive industrialization

• Encourage business formalization and transparency

This aligns with the Bank’s broader strategy of boosting market competitiveness and creating high-quality jobs for young Africans entering the labour market.

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About Adenia Partners

Adenia Partners Ltd is a leading private equity firm focused on responsible, impact-oriented investment across Africa. Established in 2002, the firm has:

• Raised over $900 million in capital

• Managed five investment funds (three fully exited)

• Invested in 34 companies across Africa

• Achieved 20 successful exits

Adenia’s approach blends financial returns with development impact, making it a strong partner for institutions like AfDB that aim to empower African businesses while fostering sustainability and inclusion.

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A Strategic Step Toward Africa’s Private Sector Transformation

The AfDB’s $15 million investment in AEF 1 is part of a larger effort to deepen private equity activity in Africa and catalyze private investment into companies that can drive industrialization and regional value chains. It reflects the Bank’s belief that Africa’s economic future depends on vibrant, well-capitalized domestic enterprises capable of scaling across borders and creating high-quality jobs.

As the Fund deploys capital across various African economies, it will help lay the foundation for a more resilient, diversified and competitive continent—one where homegrown companies play a leading role in shaping Africa’s trajectory.