KFW, a German development bank, has partnered with Aavishkaar Capital, an Indian-based company, to avail capital of $250m (Shs875.5b) to startups in Uganda.

KFW and Indian based venture capitalists, Aavishkaar Capital have partnered to help Ugandan emerging mid-market businesses to excel in the global market, with a $250m (sh875.5b) fund.  

Aavishkaar Group Chairman Vineet Rai said the fund will mainly offer capital to businesses by strengthening their environmental, social and governance (ESG) practice. 

“The fund will seek to provide transformational capital which can be invested across the capital structure, helping businesses improve their ESG standards so that they can capitalize on the increasing consumer preference for ecologically-conscious, gender-equal and purpose-driven businesses and meet increasing demands on corporate due diligence in the course of regulatory measures in the European market,” he said at the launch of the fund last week.

He added that businesses, especially exporters in the agriculture, apparel and sustainable supply value chain in Uganda should apply for the funds.

“With agriculture being the backbone of Uganda’s economy, this initiative will also help boost the country’s economic growth,” he said. 

Dr. Jan Martin Witte, Director, KFW said: “We believe in the ability of purpose-driven, responsible capital to be transformative while creating attractive investment returns. This fund aligns with our focus on ecologically-conscious sustainable businesses that bring in financial inclusion and economic development, and will help us reach businesses that are impactful.” 

He said presently, KFW is focused on improvement of the environmental, social and working conditions, as well as the gender equality in Ugandan SMEs along the supply chain. 

He explained that the ESG first fund is primarily focused on investing in Africa and Asia with the mandate of generating superior ESG outcomes and commercially viable financial returns alongside positive social impact.