Networking leader Cisco and European Investment Bank (EIB) have tied up with Riyada Enterprise Development, a unit of Dubai-based investment group Abraaj, to set up a $50 million capital fund for small and medium enterprises (SMEs) in Lebanon.

The new Lebanon Growth Capital Fund aims to provide long-term capital and institutional support to small and medium enterprises (SMEs) in the country.

It is part of Abraaj Capital’s $500 million small and medium sized investment platform, Riyada Enterprise Development (RED).

Announcing the launch, Nicolas Nahas, Minister of Economy and Trade said, “By developing a structured approach to support SMEs through multiple initiatives, the Lebanese Government is playing an important role in the growth and development of SMEs."

“The fund is a clear demonstration of the commitment from the private sector to foster innovation and long-term economic development in the country,” he noted.

According to him, the fund will target investments in 13-15 businesses that will be expected to achieve a transformational quantum of growth with the potential to expand into new regional and international markets.

This will enable Lebanese SMEs from all sectors, through the Fund’s capital infusion and active business support, to grow into leading firms in their markets, resulting in substantial job creation, innovation and long-term economic development in Lebanon.

As part of its commitment under the ‘Partnership for Lebanon’ program, Cisco will invest $7 million in the new fund, while EIB will pump in $6.75 million further extending its successful collaboration with Abraaj Capital to support SMEs in the region.

With such strong anchor investors in the fund, a strong first close of $30 million has been achieved demonstrating the high level of investors’ confidence in this Fund, the Lebanese economy, and small and medium enterprises, said Nahas.

Fadi Moubarak, Cisco Levant GM said, "Cisco’s investment demonstrates our tangible support of the SME sector and contribution to help create sustainable economic development by stimulating innovation and job creation in Lebanon.”

EIB vice president Philippe de Fontaine Vive said, "Our investment in the fund demonstrates the Bank’s continued active support for small businesses in Lebanon."

Abraaj Capital senior partner and RED chief executive officer Tom Speechley said, "We have been looking at the Lebanese market up-close for the last two years in preparation for the launch of this Fund and are confident in our ability to deploy the capital into high growth well-run businesses."

"We will be announcing the first investment by the Fund shortly and have a very strong pipeline," he revealed.

"While the fund is industry agnostic and will maintain sector concentration limits, specific industries that are of interest include information technology, media, healthcare, and services (including F&B)," he added.-TradeArabia News Service