African development Bank (AfDB) approved a $10 million equity funding to boost Information and Communication Technology (ICT)-driven production and growth in six sub-Saharan Africa countries.
The Technology and Innovation in Developing Economies (TIDE) Fund 1 will invest in companies that use new technology to provide affordable services in the energy, agribusiness, financial, education and healthcare sectors in Nigeria, Kenya, Ghana, Ethiopia, Rwanda and Zambia.
“The fund will support the development of an ecosystem facilitating growth of new technologies and new companies using proven technologies with the following development outcomes: promote the profitability of value generating companies; stimulate job creation and increase access and inclusion, including financial service by technologies and innovation,” Financial Nigeria quoted the lender.
The multi-million dollar investment is set to generate a 16 percent net return to investors in the six countries.
The investment is part of efforts by AfDB to improve the lives of African populations between 2013 and 2022, Ecofin Agency reported.
TIDA Africa Fund 1 was incorporated in Mauritius. It has a target life of 10 years and set to raise $100 million within a 5-year investment period.
More than six hundred companies on the continent are set to benefit from the fund. Six of them are ready for the first phase of the investment.
TIDA Africa Fund 1 is managed by TLcom Capital, a London-based equity company that has a professional team with a combined 80 years of experience in the technology sector.
The manager will also support growth of the local entrepreneurial ecosystem through incubators, according to AfDB.
The fund targets to increase job opportunities for the youth and women and also offers monetary and technical support to innovative businesses.
Technological innovations are seen as a major source of job opportunities for African youth, where unemployment rate is about 12 percent, and nearly five million graduates from universities across the continent each year do not get jobs, according to statistics by African Centre for Economic Transformation (ACET).