UNCDF delivers first investment in Bamboo Capital Partners' BUILD Fund
Backed by a contribution from the government of the Grand Duchy of Luxembourg, the United Nations Capital Development Fund (UNCDF) has delivered the first investment into the BUILD Fund – a blended finance fund launched by impact investors Bamboo Capital Partners in partnership with UNCDF.
It is the first time UNCDF, a United Nations agency with a specialised capital mandate to make finance work for everybody, is investing directly into a structured blended finance fund.
Luxembourg’s commitment of €2 million to the innovative impact finance vehicle will enable the BUILD Fund to bring “missing middle” finance to SMEs, financial service providers, and local infrastructure projects that have the potential for financial viability and strong development impact in the world’s least developed countries (LDCs).
The BUILD Fund is designed to attract concessional, semi-commercial and select commercial growth finance to UNCDF’s pipeline of SMEs, financial service providers, and local infrastructure projects, and is one of the few investment funds in the market with a specific focus on LDCs. It is also a critical part of a larger, groundbreaking impact investment initiative, SDG500, which will seek to raise $500 million to support businesses across multiple sectors to bridge the missing middle financing gap between seed and growth stage for businesses in emerging and frontier markets, including the LDCs. Through the BUILD Fund, UNCDF and Bamboo Capital Partners are aiming to capitalise the financing gap that affects entrepreneurs in frontier markets, where growth is constrained by a lack of access to follow-on financing.
The fund will be managed by Bamboo, while UNCDF has an important role in sourcing and vetting investment opportunities for SDG impact and financial viability. UNCDF has identified over 250 companies and projects and has built an initial pipeline of promising SMEs operating in the LDCs with strong development impact and promising fundamentals.
“This investment is an important first step towards an innovative new way to tap the capital markets to finance the SDGs,” said Esther Pan Sloane, head of partnerships, policy and communications at UNCDF. “By using development assistance to attract commercial capital to an investment vehicle focused on the LDCs, Luxembourg is demonstrating a new approach to attracting the finance LDCs desperately needed to recover from pandemic impacts and reach their development goals.”
Are you seeking private equity or venture capital investment to grow your company? Africa Private Equity News now offers you the opportunity to connect with investors backing African businesses. Contact us at editor@africaprivateequitynews.com for our rate card and more information.