European Investment Bank (EIB) and the African Development Bank (AfDB) have partnered with the European Commission to launch a new platform, Boost Africa Initiative, to support innovation and entrepreneurship across Africa.
Boost Africa will contribute to fostering the development of an efficient entrepreneurial ecosystem in Africa by supporting the earliest and riskier stages of the venture value chain, in an economically viable and sustainable way. Boost Africa aims to spur the entrepreneurial potential of the African youth to create innovative and compelling businesses with the capacity to compete regionally and globally, to attract domestic and foreign direct investment, to create new and quality jobs, and contribute to inclusive and sustainable economic growth.
As a result of an initial combined investment of up to €150 million, the Initiative is expected to leverage up to €1 billion in additional investments in a high growth sector, and support over 1,500 start-ups and SMEs across the continent.
The Boost Africa Initiative has three integrated pillars:
- Firstly, Investment Program: equity investments in seed funds, business angels co-investment funds, accelerators’ follow-on funds, venture capital funds, etc. that invest in innovative start-ups and high-growth small and medium enterprises (SMEs);
- Secondly, Technical Assistance Facility: a pool of grant resources to provide capacity building and disseminate best practices for the investment readiness of intermediaries, the business and technical assistance, training of investee companies and entrepreneurs, and the creation of local investors’ networks;
- Thirdly, Innovation and Information Lab: a platform for supporting the entrepreneurship ecosystem by fostering innovation, knowledge development and partnerships, and incubating and piloting promising new ideas, as well as assessing and disseminating best practices.
“Boost Africa will help Africa’s young population to gain hope and confidence that they can succeed in realising their dreams and aspirations,” said AfDB President Akinwumi Adesina. “Africa’s future will be determined by the current youth and it is crucial that we create and support entrepreneurship opportunities for youth, generate success stories and show these as examples for other young people.”
Through Boost Africa, the EIB and AfDB are widening their investment scope to projects that are usually deemed too small, too risky and too time consuming, but which are key to foster entrepreneurship and high impact innovation. Boost Africa is also unique in the emphasis it is putting on a sizeable technical assistance envelope, alongside financing, as well as on its Innovation and Information Lab to strengthen the investment program’s investments.
“Africa is currently home to a boom in small businesses experimenting with innovative products, services or business models, often leveraging technology,” said Adesina. “This is the right time to support these enterprises with financial and technical resources to enable them to commercialise their innovations. Boost Africa will demonstrate to all Africans that they can and should take charge of their future. Boost Africa is a key initiative within the AfDB’s Jobs for Youth in Africa initiative, one of the Bank’s High 5 priorities.”
Deploying a blended finance approach, the investment program expects to invest up to 25-30 smaller-sized equity investments into angel, venture capital and seed funds, which in turn fund start-ups and early stage businesses with high-growth and job creation potential in Africa. Boost Africa’s first investment is expected to be in Telecom Tide Africa Fund, an ICT fund investing in tech start-ups in West and East Africa. Africa Technology Ventures supporting innovative start-ups in East Africa and helping them to expand globally is also under appraisal.
