This post is part 2 of a 5 part series.
A.H.: After the initial success of the Uganda Fund, what were the next steps?
K.H.: Following our success in Uganda, we set up the Empowerment through Energy Fund in South Africa with ABSA Bank and development finance bank IDC. ABSA committed $5 million, and the Shell Foundation contributed $2.5 million, as well as some soft money to get it started and make it work.
It’s hard to stop bankers acting like bankers, focusing only on the returns. We wanted to do both finance and business development. So we hired an independent fund manager from South Africa to direct the fund. RAPS Finance, now Growth Capital, had already worked with Lanco and on the Ugandan fund. With ABSA Bank as an investor, RAPS Finance had a performance incentive. This led them to generate financial innovations, harness local knowledge and create new equity tools. Its activities were part NGO and part for-profit, and Growth Capital has now become fully commercial.
The fund is now fully deployed, with 14 SMEs financed and 192 jobs created.
