IFC and TLG Capital launch $75M startup rescue fund to support distressed ventures
The International Finance Corporation (IFC) and TLG Capital have announced the first close of a new private credit fund called the TLG Africa Growth Impact Fund II (AGIF II). With $75 million raised, the fund supports distressed startups and SMEs in Africa.
IFC’s Distressed Asset Recovery Program (DARP) supports the AGIF II fund with $20 million. Swedfund and South Africa’s Aluma Capital also invested $15 million and $5 million, respectively. Other investors who committed to the fund include Norfund, Bpifrance, and the UK Foreign, Commonwealth & Development Office (FCDO).
The IFC and TLG fund is set to provide financing in collaboration with African banks to support 20 SMEs currently experiencing difficulties with their existing loan arrangements. By working closely with financial institutions across multiple African countries, the fund aims to deliver local capital solutions that serve as a lifeline for these businesses. This strategic support is designed to help SMEs withstand macroeconomic shocks and other operational challenges, enabling them not only to survive current pressures but also to emerge more resilient.
The initiative places emphasis on key economic sectors that are vital to the continent’s development, including manufacturing, healthcare, agriculture, and telecommunications. By targeting these priority areas, the fund seeks to strengthen the broader business ecosystem and contribute to long-term economic stability and growth across the region.
The scale of financial distress among African SMEs has increased in recent times. Speaking on the IFC and TLG fund, Isha Doshi, co-founder of TLG Capital, said, “Today, one in four SME loans in Africa is under stress, and yet, the entrepreneurial spirit is unshaken. AGIF II is our answer to that call for partnership. It’s about capital that understands context, financing that’s flexible, strategic and backed by advisory horsepower from McKinsey, BDO, ESS, and Ndarama Works. TLG AGIF II brings together both capital and capacity building.”
Aliou Maiga, IFC’s Financial Institutions Group (FIG) Director for Africa, added further insight into the IFC and TLG fund’s objectives. “This initiative incorporates a strong mobilisation component that aims to leverage private sector funding to enhance the growth of financially stressed but sustainable SMEs. The fund will support local businesses that provide job opportunities and vital goods and services, contributing to the inclusive growth of the communities where these companies operate.”
In alignment with global development goals, the IFC and TLG fund focus on supporting enterprises in the United Nations’ least developed countries. Its priorities include promoting gender equality, encouraging local ownership, advancing sustainable industrialisation, and fostering decent employment. The initiative aims to show that impactful development outcomes can be achieved alongside strong financial returns.
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UK Deputy High Commissioner in Lagos, Jonny Baxter, underscores the significance of manufacturing in driving economic transformation: “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.”
The International Finance Corporation (IFC), a member of the World Bank Group, is a global development institution focused on the private sector in emerging markets. Operating in over 100 countries, the IFC provides investment, advisory, and asset management services to support private businesses. Its goal is to create jobs, boost economic growth, and improve lives by mobilising capital and using the private sector to address key development challenges in financial systems.
IFC’s DARP plays a vital role in stabilising those financial systems by investing in and resolving distressed assets, restructuring viable entities, and providing refinancing solutions to SMEs facing financial strain. Since its establishment in 2007, DARP has committed $9.2 billion globally, including the mobilisation of $6 billion, enabling financial institutions to offload over $46 billion in non-performing loans. This intervention has supported the resolution of obligations for more than 21 million debtors. By addressing high levels of distressed assets, DARP helps preserve financial stability, restore access to formal credit, and safeguard valuable assets from permanent loss.
Founded in 2009, TLG Capital has become a leading alternative asset manager focused on Africa and providing flexible financing to support growth across the continent. TLG has made 41 investments and completed 30 exits in 20 African countries. Through its Africa Growth Impact Fund II (AGIF II), TLG targets SMEs that drive development. The firm is backed by over 100 institutional and individual investors from North America, Europe, Asia, and Africa. The IFC and TLG fund reflect the company’s mission of combining capital with strategic advisory support, to deliver strong financial returns while creating lasting social and economic impact.
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