Business News of Tuesday, 22 January 2013

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Venture capital unveils action plan for 2013

The Venture Capital Trust Fund (VCTF) aimed at providing financial resources for the development and promotion of venture capital financing for Small and Medium Enterprises in the country, has unveiled its action plan for 2013 by developing regulations for the private equity and the venture capital industry. This is to make the venture a more attractive form of investments for both local and foreign investors.
To this end, the VCTF is teaming up with Securities and Exchange Commission, the statutory regulator of the securities industry, to develop appropriate rules to regulate the private equity/ venture capital industry.
This, according to officials will help the industry harness local capital, while providing the opportunity for local fund managers to leverage foreign capital to support local industries.
To further promote job creation and spur entrepreneurial activities in the country, VCTF will also support the Ghana angel investor network by providing funds for its programs and activities and providing matching funds to encourage angel investors invest in both human and financial resources in young businesses.
Describing the year as an action year full of activities, the VCTF also plans to establish the Ghana Institute for Responsible Investing (GIRI) to champion impact investing in the country. This will seek to direct both private and public capital towards economic activities that are targeted at solving social and environmental challenges, while yielding financial returns at the same time.
In a move to source for additional funding for it operations, the VCTF is expected to work with Ministry of Finance and Economic Planning to secure US$ 150 million from the Exim Bank of China to help establish additional funds and champion the industry’s growth. This comes in the wake of depleting funds resulting from VCTF’s investments and operational activities.
The demand for long term funding for SME development continues to grow in tandem with Ghana’s superior economic growth. It is expected that additional funds will put more long term smart capital at the disposal of the private sector there by spurring expansion and in turn creating more jobs for the unemployment and increasing tax revenue for the government.
It will explore new initiatives in agriculture financing by continuing supporting the agricultural value chain through it Special Purpose Financing scheme, which funds at the disposal of small holder farmers and other value chain actors operating in the northern part of Ghana. Instructively VCTF involvement since inception has created more than 4000 jobs for farmers in those communities and in 2013, it is expected to amplify these achievements by exploring other strategic initiatives on the commodity value chain, financing through the Special Purpose Financing project.
Since its inception, the Venture capital investment has been instrumental in empowering more than 40 SMEs to scale up, improve efficiencies, build managerial capacity, create new jobs, and contribute more to government revenue through taxes. For this year, VCTF plans to review the portfolio companies of existing funds to enable them undergo a full scale assessment to identify challenges, measure impact, remove impediments, and position them for strong sustainable growth.
This year, the VCTF in collaboration with Ghana stock Exchange will launch the listing Support Fund to assist SMEs seeking to raise funds on the exchange. Already the Ghana Alternative Exchange is designed to enable SMEs raise funds for business expansion on the Stock Exchange.
VCTF also plans to support the establishment of a venture capital association to champion the progress of the industry. This is in line with VCTF’s mandate to develop a vibrant venture capital industry to promote the development of Ghana’s economy by providing capital for long term business growth.
It will also embark on capacity building by providing skill development program for the industry. Adequate human capacity is a necessary condition for establishing strong and progressive venture capital industry. VCTF is poised to organized industry workshops and programs for the industry players. The Venture capital will take the form of public awareness seminars, and conferences where business communities will be educated on how to access venture capital funds and the benefits of using equity capital to pursue business expansion.
As part of its expansion program, it plans open a new office in Kumasi to enable the trust fund deepen its participation in the agricultural value chain financing program while providing the opportunity for business located within the Asante, Brong Ahafo, Upper East, Northern and Western regions to benefit from the operations of Venture Capital Fund managers.
Venture Capital Trust Fund (VCTF) has also announced the commencement of construction of the Venture Capital Towers
The Venture Capital Towers will consist of two adjacent towers; the North Tower, being a 26-floor tower and the south Tower, a 20-floor tower. The building will be constructed on a Build Operate and Transfer (BOT) basis at an estimated cost of US$30 million over a period of 24 months.
When completed, the Venture Capital Towers will be the tallest building in the Country, among prominent premier buildings such as the World Trade Centre, Heritage Towers, Premier Towers and Ridge Towers, standing as a symbol for Ghana’s Venture Capital Industry in particular and its economic achievements in general.
Located at the bustling Corporate Enclave at Ridge, an area that is fast becoming the location of choice for both large and small corporate institution including local and multinational companies. The Venture Capital Towers will offer ultra-modern office spaces with state-of-the-art facilities for corporate entities
The Venture Capital Towers is the result of several negotiations between top financiers and real estate developers from the United Kingdom. It is expected to provide an estimated 50,000 square meters of office spaces for corporate entities and equipped with a car park, restaurant etc.
The Chief Executive Officer of VCTF, Mr. Daniel Duku said “The successful completion of the Towers will symbolize the entrenchment of the venture capital industry in Ghana’s financial landscape and also present a centralized location for venture capital-related activities investments, providing crucial resources for entrepreneurs to advance their businesses to greater heights
The project architect said the Venture Capital Towers shall be completed within the timeframe. The project is being undertaken by H.G. Architect & Consultants whilst the financiers are BPA of London with their designers, developers and builders ISG and MGM.