OPIC and Abraaj Capital Sign Commitment to Regional Small and Medium Enterprise Fund During Egypt Trip
September 10, 2012
(OPIC)
Aureos, Abraaj Capital’s global SME platform,
will leverage OPIC’s $150 million to create a
$400 million regional SME financing
vehicle
OPIC’s investment in the Fund fulfills
President Obama’s pledge made at historic Cairo
speech
CAIRO, Egypt – The Overseas Private
Investment Corporation (OPIC), the U.S.
Government’s development finance institution,
and Abraaj Capital, a leading private equity
group investing in growth markets worldwide,
signed a $150 million commitment to further
enable the growth of entrepreneurial small and
medium-sized enterprises (SMEs) in the Middle
East and North Africa.
The fund, called the Riyada Enterprise
Development Growth Capital Fund (RED), will
invest in SMEs in the MENA region, including
Egypt. With a capitalization of $400 million,
the Fund managed by Aureos Capital (the small
and mid-cap investing platform of the Abraaj
Group) serves as a much-needed source of
financing for SMEs, a powerful engine of
economic growth across MENA but one which has
traditionally lacked access to long-term
capital. Through this initiative, Egyptian SMEs
are benefiting with Egypt being one of the core
target countries of the fund.
OPIC Chief of Staff John Morton and Abraaj
Capital Ltd CEO Mustafa Abdel-Wadood signed the
commitment letter at a ceremony in Cairo as
part of a U.S. delegation to Egypt led by
Deputy Secretary of State Thomas Nides and
Deputy National Security Advisor Michael
Froman, and joined by more than 100 U.S.
business executives.
In his June 2009 speech at Cairo University,
President Obama pledged that the U.S.
Government would launch a new Fund to support
technological development in Muslim-majority
countries. Later that year, OPIC issued a call
for proposals to establish technology and
innovation funds according to the President’s
pledge. The Abraaj Fund was one of a handful of
Funds approved by the Board from the 87
responses OPIC received in response to the
call. In June 2010, OPIC’s Board approved
financing for Abraaj Capital.
“Perhaps more than any agent of change, small
businesses can help to restart the Egyptian
economy and augment the transformative events
of 2011 with economic growth that reaches a
majority of the Egyptian people. Creation of
this investment fund is an important step in
that direction,” said OPIC President and CEO
Elizabeth Littlefield. “We are pleased to work
with Abraaj Capital to make President Obama’s
pledge a reality.”
Mr. Abdel-Wadood said, “As today’s announcement
demonstrates, Abraaj Capital is fully committed
to supporting the expansion of small and
mid-cap (SMC) businesses across the Arab world.
We are very pleased to have joined hands in
this effort with OPIC, which is investing in
long-term economic growth in the wider region.
We firmly believe that the SMC segment, which
continues to suffer from a dearth of capital,
is critical for economic development and job
creation. At the same time, having recently
invested in 15 SMCs across the MENA in various
value-added industries, including two
businesses in Egypt, we also recognize the
tremendous growth opportunities that exist in
this segment of the market”.
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