CDC Group,the UK’s development finance institution, has committed $25m to the Synergy Private Equity Fund II, a Nigerian fund backing small and medium-sized businesses. 

Nick O’Donohoe, CDC’s Chief Executive, said: “Nigeria plays a key part in our strategy of partnership and investment for economic growth in West Africa. CDC’s support for Synergy Fund II will help to boost Nigeria’s high-growth SMEs, supporting local entrepreneurs, job creation and economic development. 

Synergy II invests in high-growth SME businesses in Nigeria and its West African neighbours. Supporting SMEs is central to CDC’s mission to help build sustainable businesses, create jobs and improve economic prosperity.

The CDC’s investment enabled Synergy II to raise a total of $232m of capital; the Fund is targeting a total of $300m. 

CDC is also an investor in Synergy’s first fund.

In addition, CDC said it will open a regional office for West Africa in Lagos in early 2019.

CDC has been active in Nigeria for 70 years and currently has almost $400m invested in the country. 

Its portfolio of 82 businesses support 41,000 direct jobs. 

Recent CDC investments in Nigeria include Afreximbank, Jumia, Indorama and Azura Power.  

CDC is part of a growing UK Government ‘Prosperity’ offer to support Nigerian growth and poverty reduction, working alongside UK Aid’s development, trade and economic teams.

“We recently announced our ambition to invest up to $4.5bn across Africa over the next four years. This latest $25m commitment and new office launch builds on our recent momentum in Nigeria and demonstrates our commitment,” said O’Donohoe.

CDC has played a pioneering role in supporting the private equity industry in Nigeria, which channels growth capital to companies. 

Twenty years ago, CDC backed Nigeria’s first private equity fund, the Capital Alliance Private Equity Fund I (CAPE I) from African Capital Alliance and has invested in all five of its subsequent funds.