DEG, the investment arm of German state-owned development bank KFW, has committed to invest $20 million in a private equity investment vehicle managed by HIKE Capital, according to a disclosure.
HIKE Capital is an independent firm set up in 2015 by a team of seasoned entrepreneurs.
The vehicle – HIKE Capital Fund III, L.P- is a private equity fund targeting early- to late-stage growth investments in China. The fund is looking to invest in the consumer and transportation sector as well as in enterprise services.
The DEG investment is expected to support China’s goal of closing the development gap between highly developed cities on the East Coast and less developed cities in Western China whilst addressing environmental targets.
DEG, which has been actively investing in China since 1985, is stepping up focus on the manufacturing industry, particularly in the area of modernisation and energy efficiency of enterprises.
In February last year, DEG proposed a 30-million euros ($36 million) financing to Jointown Pharmaceutical Group, China’s largest private and fourth-largest pharmaceutical distributor.
DEG has also committed a $20-million loan to NMB Bank Ltd, the 7th largest commercial bank in Nepal, according to a disclosure.
The fund will be used to support NMB’s SME and micro clients (MSME) who have been affected by Covid-19.
NMB operates in the MSME, corporate, retail, agriculture and microfinance segments and is among the top lenders in the hydro project financing space.
In 2020, NMB Bank received up to a $25-million loan from the International Finance Corporation, a member of the World Bank Group.