Sopuruchi Onwuka

Manufacturing Africa (MA), one of the UK’s flagship economic development programmes for Africa, has reached a strategic partnership agreement with London-based TLG Capital to strengthen and improve the eligibility of Nigerian manufacturing companies to raise capital through TLG’s Africa Growth Impact Fund II (AGIF II).

Ad >>>

The TLG Capital also confirmed the first close of the TLG AGIF II fund, raising $75 million towards its $200 million target; solidifying the partnership which is conceived to support access to funding, create jobs and drive economic growth.

According to a statement available to The Oracle Today, the fund is anchored by the World Bank’s International Finance Corporation (IFC) and backed by a coalition of forward-looking investors: Swedfund, Norfund, and Bpifrance.

Through this partnership, the UK-funded Manufacturing Africa programme will fast track investment by supporting Africa Growth Impact Fund II with due diligence, corporate finance, ESG compliance, gender inclusion, supply chain and manufacturing operations support to eligible manufacturing companies targeted for investment by the fund. In a challenging economic climate, this collaboration is designed to support Nigerian manufacturers in accessing the capital they need to grow, create jobs and drive long term economic growth.

In view of this, the first Nigerian company enlisted for the UK Manufacturing Africa’s support to raise $7.5 million debt finance under this arrangement is Terra Aqua; an aluminum recycler based in Ogun State.

TLG Capital has expressed interest in investing this whole amount in the company subject to meeting environmental, social and governance (ESG) and other operational performance indicators that Manufacturing Africa will guide the company through.

The deal has the potential to create 200 direct jobs and 752 indirect jobs utilizing a recycling process that requires 95 percent less energy than producing primary aluminum.

Since 2020, Manufacturing Africa has supported 41 deals that are seeking to raise over $1 billion of foreign direct investment and create 38,000 direct jobs across Nigeria.  Across Africa as a whole, the programme has raised almost $2.4bn and created 102,000 new jobs. With the financial close of 13 of these deals, the programme has directly facilitated the inflow of over $150 million of foreign direct investment into Nigeria.

Speaking on this latest partnership, the UK Deputy High Commissioner in Lagos, Mr. Jonny Baxter, said: “A strong manufacturing sector is key to driving economic growth and industrialisation in Nigeria and across Africa. By supporting TLG Capital, we’re fostering greater capital flows into Nigeria, which in turn supports job creation, generates wealth and secures a prosperous future. TLG Capital is one of the key partners we are working with to improve foreign direct investments that support manufacturing in Nigeria, which will have a lasting positive impact on both our economies”

Manufacturing Africa programme Team Leader Thomas Pascoe said: “This landmark investment emphasises the scale of the development opportunity in manufacturing across Africa. Manufacturing Africa has already helped create 102,000 jobs through the $2.4bn of FDI we have supported, and we look forward to working closely with TLG Capital to support investments by the AGID II fund.”

Co-Founder of TLG Capital, Isha Doshi said: “Today, one in four SME loans in Africa is under stress, and yet, the entrepreneurial spirit is unshaken. AGIF II is about capital that understands context—financing that’s flexible, strategic, and backed by advisory horsepower from Manufacturing Africa. TLG AGIF II brings together both capital and capacity building.”

The Oracle Today reports that Manufacturing Africa is a UK government-funded programme that aims to attract £1.2 billion of foreign direct investment into African manufacturing and create 90,000 jobs before 2027. Manufacturing Africa provides manufacturing companies and investors with fully funded transaction advisory services to fast-track investment and delivers technical assistance to help transform subsectors or unblock challenges in the enabling environment.

Also, the TLG Capital is a leading alternative asset management firm specializing in African markets. It has completed 41 investments and 30 exits in 20 African countries since inception.

The Africa Growth Impact Fund II (AGIF II) is a 7-year, closed-ended fund that builds on the existing strategy of Africa Growth Impact Fund I.

TLG, along with its investment partners, has pioneered an innovative investment program to invest in African SMEs while providing capital relief to African banks. TLG partners with African banks to identify SME clients who the bank struggles to serve, and AGIF II structures tailored financing solutions for these SMEs that refinance the bank’s loan.