In Africa’s fast-evolving private equity landscape, where returns are increasingly measured by both profit and purpose, few partnerships embody the balance as strongly as that between Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) and Mediterrania Capital Partners (MCP).
This week, DEG, Germany’s leading development finance institution, reaffirmed its decade-long partnership with MCP by committing a total of €35 million to the firm’s flagship fund, Mediterrania Capital IV Mid-Cap (MC IV).
The latest €20 million follow-on investment builds on an initial stake raised to €25 million earlier this year, highlighting DEG’s confidence in MCP’s ability to scale mid-cap businesses while advancing inclusive growth across Africa.
The funding forms part of DEG’s €3.1 billion Africa and MENA portfolio, but it’s more than just capital. It’s a long-term endorsement of MCP’s model: growth equity designed to create both sustainable value and measurable social impact.
A Decade of Shared Vision and Impact
The DEG–MCP partnership spans more than a decade, with DEG deploying over €100 million across MCP’s prior funds to support high-growth ventures in North and West Africa.
Together, they’ve backed companies expanding financial inclusion in Morocco, improving healthcare access in Egypt, and modernising regional supply chains.
The renewed €35 million commitment to MC IV comes at a crucial time amid Africa’s $2.8 trillion climate finance gap for achieving its Nationally Determined Contributions (NDCs) by 2030.
The fund is well-positioned as a model for resilient, SDG-aligned growth, merging private capital discipline with developmental intent.
Mediterrania Capital IV: Scaling the “Missing Middle”
MC IV, which reached a final close at €600 million in June 2025, well above its €350 million target, focuses on mid-cap companies generating between €20 million and €300 million in annual revenues.
It targets 8–10 investments of up to €50 million each across financial services, healthcare, education, FMCG, and industrial sectors.
The geographic focus spans North Africa (Morocco, Egypt, and Tunisia) and Francophone West Africa, with flexibility for broader Sub-Saharan opportunities.
Deals already underway include growth capital injections into pharmaceutical firm Laprophan and Moroccan fintech Cash Plus.
What distinguishes MC IV is its embedded purpose framework. As a certified 2X Challenge fund, it integrates gender-lens investing to enhance women’s economic participation from leadership roles to supply chain inclusion.
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MCP formalised this commitment in 2023, and DEG, a founding 2X member, continues to drive the initiative forward.
The fund also prioritises climate resilience, leveraging DEG Impulse’s Business Support Services to strengthen ESG governance and climate adaptation across its portfolio.
Profit Meets Purpose: Measurable Outcomes
The numbers tell the story. MC IV is projected to create approximately 1,500 direct and indirect jobs, spur 20% annual revenue growth in portfolio companies, and contribute nearly €800 million to local income over its 10-year horizon.
These projections are anchored in MCP’s proven track record: over 40 portfolio companies scaled across previous funds, generating thousands of jobs and measurable value creation.
DEG’s rigorous impact measurement ensures transparency, aligning with its mandate for job creation, innovation, and private-sector resilience, especially vital in an era of constrained public funding.
“DEG’s long-term trust champions impact and inclusive growth, our shared vision where returns and social progress converge,”
said Albert Alsina, Founder and CEO of Mediterrania Capital Partners.
“Thanks to Chantal Newman and the DEG team for this journey.”
Catalysing the Next Chapter of African Private Equity
Africa’s private equity assets under management have now surpassed $80 billion, with mid-cap funds like MC IV bridging the continent’s long-standing “missing middle” financing gap.
Targeting 20–25% IRR, the fund delivers commercial-grade performance while embedding measurable social outcomes, a model increasingly demanded by institutional investors worldwide.
For DEG, this partnership points to a new development finance paradigm: one where patient capital and purpose-driven performance reinforce, rather than contradict, each other.
As Africa’s economies navigate climate risks, demographic expansion, and a digital transformation wave, MC IV’s blended strategy backed by steadfast partners like DEG could define the next era of private equity on the continent.
DEG and Mediterrania Capital Partners Overview
DEG investment and DEG finance are key initiatives of DEG company, a German development finance institution under DEG KfW.
With operations in DEG Germany and DEG Kenya, DEG supports private sector growth and sustainable development in emerging markets.
In parallel, Mediterrania capital iv owner works through Mediterrania Capital Partners, a private equity firm managing multiple funds across Africa.
The firm’s Mediterrania Capital Partners AUM reflects its significant investment footprint in high-growth sectors, often collaborating with institutions like DEG to drive impact and scale.
Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, climate change, and digital finance at Africa Digest News.
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