Stockholm (NordSIP) – Swedfund announced it invested US$15 million in the TLG Africa Growth Impact Fund II (TLG AGIF II), a private credit fund. In another announcement, Norfund confirmed it had also invested US$10 million in this fund. The investment aims to make capital available to SMEs in developing countries so that more jobs with decent working conditions can be preserved and the companies can develop and grow. Swedfund and Norfund are the Sweden and Norway’s develoment investment agencies.
“SMEs employ 80 percent of the African workforce, and nine out of ten new jobs on the continent are created by growing companies. Protecting existing jobs and creating new ones is crucial for poverty reduction. For these companies to survive and grow, it is important that there is a functioning market with the right financial services that are adapted to the purpose and the diverse local challenges that exist. Through this investment, we can help achieve this and thereby have a long-term positive impact,” says Jakob Larsson, Senior Investment Manager, Swedfund*.
Swedfund’s Investing Partners
The announcements correspond to Swedfund’s and Norfund’s share of the first close of TLG AGIF II, which raised a total of US$75 million thanks to added funds from the International Finance Corporation (IFC), BPI France and the UK Foreign, Commonwealth & Development Office (FCDO) through its Manufacturing Africa program. Swedfund has had a relationship with TLG since 2018, when it invested in the TLG Credit Opportunities Fund.
The IFC is anchoring the AGIF II Fund with a commitment of up to $20 million through its Distressed Asset Recovery Program (DARP).
This initiative incorporates a strong mobilisation component that aims to leverage private sector funding to enhance the growth of financially stressed but sustainable SMEs,” said Aliou Maiga, IFC’s Financial Institutions Group (FIG) Director for Africa. “The fund will support local businesses that provide job opportunities and vital goods and services, contributing to the inclusive growth of the communities where these companies operate.”
TLG’s Approach to Investing in Africa
Small and medium-sized enterprises (SMEs) in Africa struggle accessing loan capital that meets their needs. This can be particularly challenging for viable SMEs that temporarily need liquidity or payment facilities that commercial banks rarely offer. Through the investment in TLG AGIF II, Swedfund hopes to help bridge this financing gap by supporting scalable credit solutions.
“Today, one in four SME loans in Africa is under stress. And yet, the entrepreneurial spirit is unshaken. AGIF II is our answer to that call for partnership. It’s about capital that understands context—financing that’s flexible, strategic, and backed by advisory horsepower from McKinsey, BDO, ESS, and Ndarama Works. TLG AGIF II brings together both capital and capacity building,” concluded Isha Doshi , Co-Founder of TLG Capital.
TLG AGIF II
* Translated from Swedish
