Proparco launches CREA Fund to support cultural and creative industries in Africa
Proparco announced the signature of the CREA Fund (Creative Enterprise Action Fund) Facility, designed to support the Cultural and Creative Industries in Sub-Saharan Africa.
The facility is composed of a Guarantee component and a Technical Assistance (TA) component. It will benefit from the financial support of the European Union (EU), up to €6.47 million, with an expected leverage effect of more than €20 million of private finance, and will be launched in the fall of 2022.
Small and medium-sized enterprises (SMEs) make up the majority of the African economic fabric: they represent about 90% of the continent's businesses. Among these, the Cultural and Creative Industries (CCI), which are in their great majority small or young enterprises, are particularly conducive to innovation, inclusive development and job creation, especially among women and youth.
They cover a wide range of activities: architecture, fashion, music, visual and performing arts, cinema, photography, radio and television, publishing and video games. On a global level, CCIs represent nearly 3% of the world's GDP and nearly 30 million jobs. But despite their potential, only 1.1% (USD 22 million) of total investment by African startups in 2019 was dedicated to CCIs. This difficulty in accessing innovative financial instruments hinders the growth potential of these CCIs, in often already complex contexts.
The objective of CREA Fund is to facilitate access to financing for companies active in CCIs and to stimulate their economic potential in Sub-Saharan Africa. Proparco will thus propose a two-tiered offer: a Guarantee component and a Technical Assistance (TA) component. The Guarantee component of the Facility (€5 million) will cover Proparco's partner funds and/or FISEA + (AFD Group's facility advised by Proparco and a member of the Choose Africa initiative) for any investment in a CCI in Sub-Saharan Africa, with the expected effect of mobilizing more than €20 million from private financial sources.
Jérémie Ceyrac, Head of Investments, Proparco: "With this Guarantee Facility dedicated to the financing of Cultural and Creative Industries, Proparco continues to enrich its offer and its instruments, in order to support high-impact investment on the African continent."
The TA component (€1.47 million) will also aim to remove some of the obstacles to investment that Proparco's partner funds and banks may encounter by offering them support in setting up dedicated strategies or appropriate pipelines, conducting due diligence or training their teams. It will also enable them to strengthen the capacities of their prospects or of the CCIs invested in, through the use of external expertise.
CREA Fund is being deployed as part of the CreatiFI initiative launched in 2019 by the European Commission. Its operational launch is scheduled for the second half of 2022.
Chiara Adamo, Acting Director, Human Development, Migration, Governance and Peace, EU: "Through the innovative financing of CREA Fund, the European Commission's Directorate General for International Partnerships supports the job creation potential of African creative and cultural industries, which will also benefit youth."