The European Investment Bank has committed $37.5 million to Tanmiya Capital Fund II, a private equity fund that will provide growth capital to established small and medium-sized businesses in Egypt, the bank said.
The investment, made through the EIB’s development arm EIB Global, was announced at a ceremony in Cairo attended by EIB Vice-President Gelsomina Vigliotti and Tanmiya Capital Ventures managing partners Ahmed El Guindy, Youssef Ahmed Ayoub and Mohamed Mohsen Mahgoub.
Tanmiya Capital Fund II has closed at $130 million, exceeding its $120 million fundraising target, according to the EIB. The fund’s investors include the Egyptian-American Enterprise Fund, the European Bank for Reconstruction and Development, the International Finance Corporation and Egypt’s Micro, Small and Medium Enterprise Development Agency, it added.
Managed by Egyptian investment firm Tanmiya Capital, the fund will invest in a portfolio of established companies, with expected investments across healthcare, training, financial technology, consumer goods, logistics and transport, the organisation said.
Focus on established firms and gender equality criteria
The fund is intended to address limited availability of long-term equity finance for small and medium-sized companies in Egypt, the EIB said. It will combine investment with strategic and managerial support, with the expectation that portfolio companies will scale up, improve governance and create jobs, it added.
At least 30% of portfolio companies are expected to meet one or more of the EIB’s criteria for financing that supports gender equality, according to the bank.
The fund is expected to build a portfolio of six to eight companies and support thousands of jobs across Egypt, the EIB said. The bank added that it will contribute environmental, social and governance standards — often referred to as ESG — through its participation in the fund’s advisory committee.
“Egypt’s private sector has enormous potential to drive sustainable growth, create quality jobs and deepen economic ties with Europe,” Vigliotti said. “Our investment in Tanmiya Capital Fund II will provide ambitious local companies with the growth capital and expertise they need to expand,” she added.
“The successful closing of Tanmiya Capital Fund II above its target reflects strong investor confidence in our strategy and in the potential of Egypt’s private sector,” El Guindy said.
The investment is also expected to strengthen commercial links between Egypt and Europe, as portfolio companies may source equipment, technology and services from European suppliers or develop partnerships with European businesses, the EIB said.
