OPIC Board Approves $52.5 Million for Maghreb Investment Fund

Friday, December 09, 2011
WASHINGTON, D.C. – Businesses in North Africa, where bank financing and private equity were scarce even prior to the Arab Spring, obtained a new source of financial support with the approval by the Board of Directors of the Overseas Private Investment Corporation (OPIC) of $52.5 million in financing for a new private equity fund expected to mobilize up to $210 million of investment in the region.

The fund will target investment in small and medium-sized high-growth companies with the potential to grow into regional champions – another imperative for a region urgently in need of economic integration.

This is the latest step toward fulfilling Secretary of State Hillary Clinton’s March announcement that OPIC, the U.S. Government’s development finance institution, would provide up to $2 billion in financial support for investment in the Middle East and North Africa. OPIC responded quickly:  in June, OPIC’s Board approved $500 million in financing to support lending to small businesses in Egypt and Jordan, and in October approved $150 million in additional lending for the region.

“As President Obama has said, supporting businesses that create jobs is a key way the U.S. can support the events of the Arab Spring.  People need to see the fruits of their tremendous efforts to bring about democratic change.  This fund is designed to fuel entrepreneurial North African businesses to do just that,” said OPIC President and CEO Elizabeth Littlefield.

The fund, Maghreb Private Equity III, will invest in SMEs which are expected to contribute employment, wealth creation, and access to goods and services for formerly underserved populations in the region. The fund will be available to invest in OPIC-eligible countries in the Maghreb, including Tunisia, Morocco, Algeria, Egypt, and – when opened – Libya.

OPIC selected as fund manager TunInvest, part of TunInvest-AfricInvest Group, one of the leading private equity firms in North and sub-Saharan Africa, with more than $650 million of assets under management across eleven private equity funds.

According to the Arab Maghreb Union, the absence of a united Maghreb inflicts a two percent loss in annual growth among its member nations. Interstate commerce in North Africa is equivalent to 1.3 percent of the region’s trade, the lowest regional rate in the world.