JICA allocates $40 million towards Aavishkaar Capital's logistics investment fund
The Global Supply Chain Support Fund (GSCF) has received significant boosts, with new commitments totalling $95 million. The fund, which targets a portfolio of 18-22 companies at any given time, provides credit to private firms operating in international business supply chains in Africa, India, and other parts of emerging Asia.
The Japan International Cooperation Agency (JICA) has committed $40 million to the GSCF, joining the German development bank KfW, which has also invested in the fund and is a founding partner. The GSCF, established in 2022, aims to reach a total size of $220 million.
The fund's focus sectors include agriculture, food processing, and manufacturing. Horizon Group, a spices processor in Nigeria, Tanzania, and Madagascar, is one of the recipients. Hela, an apparel manufacturer and supply chains solutions provider, with facilities in Sri Lanka, Kenya, Ethiopia, and Egypt, is also a recipient. POSHS metal industries, an auto-grade steel processor based in India, is another beneficiary.
The GSCF offers loans typically in the $3m-$7m range with three-to-five-year tenors. It is open to refinancing structures for performing businesses over a longer duration. The fund manager, Aavishkaar Capital, supports companies in establishing systems, processes, and governance structures to make them more attractive to larger institutional investors.
Aavishkaar Capital, the impact investing arm of the Aavishkaar Group, has launched eight funds to date and manages $550 million in assets. Besides KfW and JICA, the Dutch development bank FMO and the French development agency AFD have also invested in the credit fund of Aavishkaar Capital.
The GSCF is designed to support small and medium-sized enterprises (SMEs) with a significant social and environmental impact. The loans provided by the fund are intended to help these businesses scale up their operations, improve their supply chain efficiency, and ultimately contribute to sustainable economic growth in the regions they operate.
In addition to the GSCF, Aavishkaar Capital has recently announced an €80m first close of a digital access impact fund. This new fund aims to bridge the digital divide in emerging markets, providing access to digital services and infrastructure for underserved populations.
The GSCF's success is a testament to the growing interest in impact investing, where financial returns are balanced with social and environmental benefits. As more investors focus on creating positive change, funds like the GSCF are poised to play a crucial role in driving sustainable economic development in emerging markets.
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