Mauritius
Successful Mauritian investment fund expanding

afrol.com, 8 September - The Indian Ocean Regional Fund Limited (IORF), incorporated in Mauritius, was launched last year focusing on the rehabilitation of existing business. It started with a capital of US$ 13 million, and is expected to increase to US$ 20 within short. Yesterday, the African Development Bank (ADB) approved a US$ 3 million equity investment proposal in the Fund.

The Fund’s objective is to provide long term capital growth and income for its investors with the aim of achieving a financial internal rate of return (FIRR), in US dollar terms, of at least 20% per annum. The main focus of the Fund is expansion and rehabilitation of existing business, but it will also invest in start-ups with a sound business proposal, an experienced and credible management team and robust financing plan. The Fund targets various sectors such as agriculture, manufacturing, transport and communications, information technology services, etc.

The ADB investment proposal aims at participating in the second closing of the IORF, a venture capital fund whose business activity is to make equity and quasi-equity investments in private companies of Mauritius and the ADB’s regional member countries in the Indian Ocean region. The Fund was launched in 1999 with a subscribed capital of USD 13 million. This second closing of the Fund aims for a total capital of USD 20 million which is expected to be fully invested in 4 years. 

The Bank will invest USD 3 million in the form of equity investment, representing 15 % of IORF’s share capital of USD 20 million. The Fund is sponsored by the Commonwealth Development Corporation (CDC), a British statutory corporation established in 1948, which has already financed investments of USD 736 million in 170 enterprises in Sub-Saharan Africa. 

In addition to CDC, other investors include the Mauritius Commercial Bank Limited Group, the largest bank in terms of asset base in Mauritius, and NORFUND, established in 1997 by the Norwegian Government to encourage profitable industrial and commercial development in emerging countries through direct investments.

The investment will provide the ADB with visibility in the region’s private sector. It is in line with the Bank’s strategy to promote small and medium sized enterprises and foster the development of financial intermediaries. This investment will also serve the Bank’s objective of playing a catalytic role in developing capital markets in Africa and foster cross-border trade and investments between its RMCs.

Source: African Development Bank

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