SDG Frontier Fund
Impact investing in developing economies
The SDG Frontier Fund (SDG FF) is a Belgian investment vehicle focused on generating positive social and environmental impact alongside financial returns. Established in December 2019 as an initiative of BIO, the fund operates as a self-managed fund-of-funds (FoF). This chapter explores the SDG FF's approach to achieving its dual objectives in frontier markets across Africa and Asia.
2023 Developments
In 2023, the SDG FF invested in the Omnivore Agritech & Climate Sustainability Fund 3, focusing on sustainable agricultural practices, bringing the total number of funds in its portfolio to eleven.
Additional investments were made in the Incofin India Progress Fund, demonstrating the SDG FF's continued commitment to fostering development in Asia.
The number of investees indirectly supported by SDG Frontier Fund reached 98 at the end of 2023, already very close to the target that was defined at the outset to support a total of 100 SMEs.
Investments of the SDG FF
The SDG Frontier Fund has committed EUR 3.2 M in equity in FIVE, an evergreen investment fund focusing on financial inclusion in Africa.
The SDG Frontier Fund has invested USD 1.7 M in equity in the African Rivers Fund III, an SME fund which invests in small and medium-sized enterprises in Central and Eastern Africa.
The SDG Frontier Fund has invested USD 2.3 M in equity in Ascent Rift Valley Fund II, an SME Fund targeting fast-growing SMEs in Eastern Africa. A follow-on investment of USD 1.7 M was made in June 2022, bringing the total commitment to USD 4 M.
The SDG Frontier Fund has invested EUR 4 M in Equity in the Cathay Africinvest Innovation Fund Ltd, a Pan African Venture Capital Fund.
The SDG Frontier Fund has invested USD 2.2 M in Excelsior Capital Vietnam Partners, a private equity fund focused on Vietnam.
The SDG Frontier Fund has invested USD 1.7 M in the Ezdehar Mid-Cap Fund II, a Private Equity Fund focused on Egypt.
The SDG Frontier Fund has invested EUR 2 M in equity in the Incofin India Progress Fund, a Financial Inclusion and Agribusiness Fund focused on India. A follow-on investment of EUR 1.5 M was signed in February 2023,
bringing the total commitment to EUR 3.5 M.
The SDG Frontier Fund has invested USD 2,5 M in equity in the Omnivore Agritech & Climate Sustainability Fund III, an Indian VC fund specialized in the Agritech sector. A follow-on investment of USD 1 M was signed in October 2023, bringing the total commitment to USD 3.5 M.
The SDG Frontier Fund has invested USD 2.2 M in the South Asia Growth Fund II LP (SAGF II), a 10-year closed-end investment fund that will invest in energy efficiency and clean energy sectors.
The SDG Frontier Fund has invested USD 2.5 M in equity in the TIDE Africa II Fund, a venture capital fund focusing on technology-enabled services and innovation for Africa.
The SDG Frontier Fund has invested USD 2.5 M in equity in the Uhuru Growth Fund I, a PE fund focused on the Ecowas region
Investing for impact and returns
The SDG FF targets micro, small, and medium-sized enterprises in developing countries. It achieves this by co-investing with BIO in private equity funds managed by experienced fund managers. These funds then directly invest in promising MSMEs across various sectors.
The core objective of the SDG FF is to contribute to the achievement of the SDGs adopted by the United Nations. These goals tackle critical global challenges like poverty, inequality, climate change, and environmental degradation. By investing in SMEs that align with these goals, the SDG FF aims to generate a positive development impact.
The goal of the SDG Frontier Fund is to generate an attractive financial return combined with a high development impact.
The Sustainable Development Goals (SDGs) are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity.