Taking into account the provisions for governing bodies that apply under the ‘Freedom of Information Act’ (‘Wet openbaarheid van bestuur’) and the ‘Data Protection Act’ (‘Wet bescherming persoonsgegevens’), the Fund Manager of the DGGF part ‘Financing local SMEs’ will publish its anticipated transactions.
Views
Parties can express their views on the proposed transaction to the Fund Manager by contacting dggf@pwc.com within 30 days after the publication date of the notice. After the transaction has been closed, or after it has become clear that the transaction will not take place, the Fund Manager will respond as soon as possible to these Parties concluding on the expressed views by these Parties.
Description of proposed transaction
Part of DGGF
Financing Local SMEs
Name of Intermediary Fund (IF)
Sawari Ventures Africa Fund II Coöperatief U.A.
Domicile IF
Sawari Ventures Africa Fund II will be domiciled in Netherlands.
Name of manager of the IF
Sawari Ventures for Fund & Portfolio Management II B.V.
Nature of the activities of the IF
Sawari Ventures Africa Fund II Coöperatief U.A. will continue a Series A and Series B strategy fromits previous fund with seed investments made through separate vehicles. The Manager will make equity and equity like investments between USD 1 to 7 million with additional follow on investments.
Size of proposed investment
DGGF has approved up to USD 8 million, contributing to a total expected fund size of approximately USD 50 million, split across a international fund and one vehicle for Egyptian investors.
Intended transaction date
It is expected that DGGF will close the agreement with Sawari Ventures Africa Fund II Coöperatief U.A in Q4 2025.
Expected financial results
A positive financial return on the investment is expected.
Expected impact
DGGF's commitment will support tech-enabled SMEs with a primary focus on North Africa and allocation to Sub-Saharan Africa. Sawari has a strong track record of supporting valuable startups that create jobs in the knowledge sector. Its previous fund financed a total of 20 SMEs since the launch in 2018. The companies are supporting a total of 1766 jobs and created a total of 1318 jobs. Outreach to target groups of DGGF is positive with 37% of capital invested in youth-led enterprises.
ESG compliance
The Sawari Ventures team has consistently demonstrated responsiveness and a strong ability to identify, assess, and mitigate ESG risks in our prior collaboration regarding the first fund that DGGF is also invested in. Sawari Ventures is considered as a frontrunner regarding ESG in the DGGF portfolio. It demonstrates a robust ESG process throughout the investment cycle, including ESG criteria during deal sourcing, due diligence, and ongoing portfolio monitoring. Their ESG integration aligns with the DGGF’s requirements regarding the exclusion list and the assessment of ESG principles. The process around handling of complaints and the governance behind it are in line with DGGF standards, however, DGGF requires that the complaints mechanism is publicly available to all stakeholders, regardless of whether these are internal or external. Therefore, the condition for investment is that Sawari Ventures will set up a grievance procedure in accordance with the DGGF Track 2 Guidance on Complaints Mechanisms included in the ESG Guidelines within two (2) months of the first closing date.
Tax compliance
DGGF will invest into Sawari Ventures Africa Fund II Coöperatief U.A. The Fund will be domiciled in the Netherlands and will be subject to the regular corporate income tax rates in the Netherlands. The Fund will invest in SMEs primarily in North Africa and Sub-Saharan Africa. The SMEs are in principle subject to the local statutory tax rates. The Fund is not making use of artificial constructions to lower its taxation or the taxation of the SMEs it invests in. The Fund requires the companies it invests in to comply with local laws and regulations, amongst others, those regarding tax and Sawari II will monitor if the SMEs meet their tax obligations. DGGF will monitor whether the Fund will meet its ongoing tax obligations and acts in accordance with the DGGF tax criteria.
In this context, the DGGF tax team has proposed standard and specific conditions to be included in the investment agreement to continuously comply with DGGF tax criteria.