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AfDB-EMRC SME Forum Session 8 Diogo Araujo


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AfDB-EMRC SME Forum Session 8 Diogo Araujo

  1. 1. Investments through SME partnerships SOFID an innovative sollution by Diogo Gomes de AraújoAfDB-EMRC SME Forum 6 June 2011Bridging the Missing Middle Gap in Africa Lisbon
  2. 2. Summary1.SOFID as an innovative solution2.SOFID vs. traditional banking3.Eligibility criteria4.What is on offer?5.Examples of projects
  3. 3. 1. SOFID as an innovative solution
  4. 4. 1. SOFID as an innovative solution• Portuguese DFI with SME focus• Regulated by Portugal’s Central Bank• HQ in Lisbon• Twofold mandate: – Support Portuguese companies and business partners investing in emerging and developing countries – Promote sustainable private sector development in those countries
  5. 5. 2. SOFID vs. traditional banking ADDITIONALITY: SOFID only participates in operations where it adds value• Sustainable investment: social and environmental responsibility, job creation, knowledge transfer, wealth distribution• Political comfort: public-private shareholders• Flexibility: adjust to client needs• Focus and specialisation: partnerships, products and markets
  6. 6. 3. Eligibility criteria• Minimum 20% Portuguese stake• Productive sectors (no real estate)• Brown and green-field projects• Economic and financial viability with social and environmental concerns• Preferably in PARTNERSHIP with local banks
  7. 7. 4. What is on offer?• Tailor made financial products  Loans  Guarantees  Equity  Funds• Financial services  Financial advice  Resource mobilisation
  8. 8. 4. Loans and Guarantees• Commercial terms (no soft money)• Grace period up to 3 years• Maturity up to 10 years• Hard currency• Local bank provides local currency
  9. 9. 4. Funds• ITF – EU-Africa Infrastructure Trust Fund• NIF – Neighbourhood Investment Facility• InvestimoZ – Portuguese Fund for Investment in Mozambique
  10. 10. 5. Case study 1HIGEST • Poultry industry in Mozambique • Sells chicks and feed to local farmers • Buys back chickensLeading FI: Millennium bim • Frozen chicken is suppliedTotal investment: € 2 M • Network of “containerSOFID guarantee: € 0,5 M shops”Sponsor: Higest 10
  11. 11. 5. Case study 2PREMAP • Production, supply and sale of precast concrete parts • Maputo and Dondo (MZ) • Upgrade operations and expand productionLeading FI: SOFID capacityTotal investment: € 0,7 M • Locally produced goods forSOFID Loan: € 0,4 M the domestic marketSponsor: Concrepax 11
  12. 12. 5. Case study 3PRIO FOODS • Agricultural produce for the food processing industry • 80 direct staff + 1,000 local farmers • Sofala region (MZ)Leading FI: SOFID • Guarantee secured financeOther IF: BCI from a local bankTotal investment: € 2,3 M • Crop diversification andSOFID guarantee: € 1,7 M supply to domestic marketSponsor: Prio 12
  13. 13. African sayingIf you want to go fast, run like the gazelle If you want to go far, run together like the buffalo
  14. 14. Thank you Diogo Gomes de Araú •