DEG investments set new all-time record
In 2016, the German Investment and Development Corporation DEG committed around 1.6 billion Euro for investments in private-sector companies in developing and emerging-market countries (2015: 1.1 billion Euro) – a new all-time record in almost 55 years of DEG’s history. In the past year, DEG was in even greater demand as a provider of finance and advice. Its commitments facilitate entrepreneurial investments totalling 6.6 billion Euro.
Enlarge image (© Colourbox) "We experienced dynamic growth last year. DEG’s portfolio now amounts to 8.6 billion Euro. Private enterprises operating in developing and emerging-market countries count on our experience and knowledge to make investments successful in the long-term," emphasised Bruno Wenn, Chair of DEG’s Management Board.
Around 60 per cent of the new commitments in 2016 were destined for small and medium-sized enterprises. DEG thus again contributed to improving financing options for these companies in many developing countries.
For instance, DEG financed an investment for expanding a biscuit manufacturer, Beloxxi Industries Ltd. in Nigeria. The company can now enlarge its production using German plant technology and create approximately 300 new jobs. "Our involvement is supporting a successful SME family business as it continues to grow," mentioned Chairman Wenn. "Our collaboration demonstrates how we can advance entrepreneurial initiative in Africa and create prospects for people."
DEG reached over 110 German companies with its financing and promotional programmes in 2016, providing them with 268 million Euro, almost double the previous year. One of these enterprises: the Schlote Group. The automotive supplier is setting up a production facility in China, its first overseas investment outside Europe.
Enlarge image Vehicles in the streets of Abuja (© German Embassy Abuja) With its Business Support Services DEG offers its customers tailored advisory solutions. In 2016, 85 such measures were performed. "By doing so, we're providing targeted support to companies for improving their energy efficiency or providing qualifying measures for local staff. This thereby creates economic and developmental added value," explained Wenn. For example, in Kenya the company Meru Greens Horticulture obtains advice on training farmers under contract. DEG promotional programmes also co-finance pilot investments and feasibility studies of companies. In 2016, around 180 projects were financed with approximately 30 million Euro.
On a regional basis, commitments developed particularly well in Latin America: A plus of over 60 per cent was recorded with 507 million Euro (2015: 310 million Euro). The continent was thus almost equal to Asia with 512 million Euro. A total of 331 million Euro was destined for Africa, growth of approximately 17 per cent compared with 2015.
Enlarge image (© www.colourbox.com) In 2016, the lion's share of the commitments were made in the financial sector with 592 million Euro. DEG finances banks and funds in developing countries, particularly those that provide long-term capital to small and medium-sized enterprises. More funds were also allocated to investments in manufacturing industry at 319 million Euro.
DEG expects to face challenging markets and conditions again in 2017, and will strive to reach the level of new business generated in 2016. "Our customers can rely on us, and know that we will advise and support them – even when times are getting tougher," commented Wenn.