USAID Southern Africa Mobilizing Investment (USAID Mobilizing Investment) has awarded grant capital to Verdant Capital for its new fund strategy, the Verdant Capital Southern Africa Fund (VCSAF).

Verdant Capital was one of the very few fund managers selected by USAID from a very significant cohort of applicants.  

The grant aims to bolster VCSAF’s development, fundraising, pipeline development and improving its operational capacity.

This will be achieved by supporting Verdant Capital in expanding its team, facilitating Verdant Capital to connect with potential investors, investees and partners, and support with legal closing.

It will enable Verdant Capital to utilise its expertise in credit fund management and credit deployment in Southern Africa to improve access to debt finance for the ‘missing middle’.  

Verdant Capital was selected for the grant based on the strength of both the commercial and developmental proposition of VCSAF and given Verdant Capital’s performance to date as an emerging credit manager.  

At closing, VCSAF will be managed separately from Verdant Capital Hybrid Fund I and its planned successor fund, Verdant Capital Hybrid Fund II, which will be launched later this decade.

Verdant Capital Hybrid Fund I invests hybrid or mezzanine capital into inclusive financial institutions, especially those supporting micro and small enterprises and especially digitally transformed and enabled lenders. 

The Verdant Capital Southern Africa Fund will invest debt capital into medium-sized enterprises across the Southern Africa region seeking finance to expand business operations or trade and facilitate such businesses overtime accessing additional debt and equity financing.

VCSAF will be investing in the following sectors: manufacturing, enabling services (e.g. logistics and light infrastructure), agri-business, renewable energy, education, water, sanitation, and hygiene (or WASH), housing, healthcare and the circular economy. The sector focus of VCSAF is aligned with the targeted impact: long-term sustainable development.  

The targeted size of the fund is $60m.  

VCSAF is aligned with Verdant Capital's vision of fostering an ecosystem for sustainable long-term economic growth.

USAID Mobilizing Investment uses a market systems approach to accelerate investment and inclusive economic growth in Southern Africa.

As a market facilitator, USAID Mobilizing Investment works with and through the private sector to identify investment opportunities. It uses blended finance/catalytic capital de-risking to align incentives and mobilise capital while strengthening the skills, relationships, and information sources and flows necessary to change market behaviour and dynamics across investment ecosystems.