IFC invests $ 10 million in Dolma Impact Fund II
The International Finance Corporation has decided to invest $ 10 million in Dolma Impact Fund II to help provide financing to small and medium-sized businesses, in healthcare, renewable energy, technology and other critical, essential sectors. the recovery of an economy plagued by the pandemic. .
Private equity funds like Dolma can be an important source of capital and expertise for Nepalese businesses with the potential to grow, including those struggling to cope with the impacts of the Covid-19 pandemic, a said IFC’s resident representative in Nepal, Babacar S Faye.
SMEs are a key engine of growth in Nepal, contributing 20 percent of gross domestic product and creating more than 60 percent of jobs in the country. Even before the pandemic hit, SMEs were already struggling to have limited access to finance.
At present, only 39 percent of Nepalese SMEs have access to finance. The availability of additional finance for SMEs will be key to any sustainable and inclusive economic recovery in Nepal, said a press release issued by the IFC.
“Dolma Fund Management is one of the first private equity fund managers to focus in Nepal. He completed the initial $ 40 million closing of Dolma Impact Fund II in May 2021, in order to invest in companies with high growth potential, in particular small and medium enterprises ”, said Tim Gocher, CEO of Dolma Fund Management.
“This will help increase their capacity, increase their skills and competitiveness, and create sustainable jobs in Nepal. The target fund size is US $ 75 million. We are confident that IFC’s participation will further boost fundraising. of funds and will help us reach our target size. “
IFC’s equity investment includes $ 5 million from the International Development Association’s private sector window, created to catalyze private sector investment in low-income countries.
The Global Investment is part of IFC’s SME Ventures program, which provides venture capital to entrepreneurs and fund managers in low-income countries where such funding is scarce or unavailable.
“With the increase in Covid-19 cases, Nepal is in a difficult situation, but we believe in the potential of the country,” said IFC Resident Representative in Nepal Babacar S Faye.
“By providing capital in emerging markets like Nepal, where it is scarce, private equity funds can help local businesses grow their businesses, create more jobs and deliver essential goods and services. We also hope this will send a strong signal to the market that we are confident in the resilience of Nepalese entrepreneurs.
With a combined capital of less than $ 100 million, private equity funds operating in Nepal are smaller than those in other emerging economies and there is significant growth potential.
In 2015, IFC invested $ 7 million in Business Oxygen (BO2), Nepal’s leading national private equity firm, which was subsequently increased by an additional $ 7.3 million in 2017.
IFC’s current combined engagement portfolio in Nepal stands at $ 550 million.