TLG Capital has announced the successful second close of its TLG Africa Growth Impact Fund II (AGIF II), bringing total commitments to $120 million.
The second close was led by Proparco and Calvert Impact Capital, alongside six new investors and increased commitments from existing backers, including Swedfund, taking the fund to 22 investors and a strategic partnership with the UK Foreign, Commonwealth & Development Office through its Manufacturing Africa programme.
From $75 Million to $120 Million in Under a Year
The TLG Capital $120 million second close for the Africa SME impact fund in 2026 builds directly on a $75 million first close in April 2025, an expansion that reflects both investor confidence and the fund’s demonstrated deployment capability.
Since the first close, AGIF II has already deployed capital into nine SMEs across seven countries and seven sectors, providing debt facilities ranging from $5 million to $15 million per company.
That deployment pace matters as much as the fundraising figures. A fund that raises capital but struggles to find investable opportunities undermines its own thesis.
AGIF II’s ability to deploy across seven countries and seven sectors within the first close period demonstrates a pipeline depth that gave investors the confidence to commit further capital at the second close.
How TLG Capital’s BOMA approach is de-risking SME lending in Africa is the structural innovation that distinguishes AGIF II from conventional African private debt funds.
Under the Bank Originated and Mitigated Assets model, loans to African SMEs are originated through local banking partners, structured with longer tenors than typical bank offerings, and fully backstopped by guarantees from the originating banks, providing 100% principal protection.
That structure solves two problems simultaneously. Local banks understand their SME clients’ creditworthiness and operating context far better than an international fund manager assessing risk from outside the market.
By originating through those banks and securing their guarantee, TLG transfers the local credit assessment expertise into the fund’s risk model while retaining the longer tenors that SMEs actually need to invest in growth, rather than the short-term facilities that conventional bank lending typically offers.
Tibor Asboth, Head of Africa and Middle East Private Equity at Proparco, described the approach directly: financing SMEs in sub-Saharan Africa requires mechanisms that help mitigate credit risk and improve investment conditions for international investors, and BOMA addresses those challenges by incorporating guarantees from African banking institutions.
Proparco, Calvert Impact, and Swedfund: Why Institutional Investors Backed AGIF II
Proparco, Calvert Impact, and Swedfund backing AGIF II’s African SME financing strategy in 2026 represent three development finance institutions with distinct mandates converging on the same investment thesis. Each brings a different lens to why the structure works.
Maya Burney, Senior Officer at Calvert Impact, noted that Calvert has spent over 30 years being selective about financing partnerships in jurisdictions with elevated perceived and real risk characteristics and that TLG has demonstrated a unique ability to innovate while providing meaningful downside protection in line with what commercial private capital requires.
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That endorsement from an institution with three decades of impact investing discipline carries particular weight: Calvert is not a first-time entrant testing an unfamiliar market but an experienced allocator validating a specific risk mitigation structure.
Bank-Guaranteed SME Debt Facilities and What They Solve
TLG Africa Growth Impact Fund II’s bank-guaranteed SME debt facilities in 2026 address a financing gap that has persisted across sub-Saharan Africa for years: SMEs that are creditworthy and operationally sound but cannot access the longer-tenor financing needed to invest in equipment, working capital, or expansion.
Conventional bank lending in many African markets is short-term and expensive, reflecting the bank’s own funding cost structure and risk appetite rather than the SME’s actual repayment capacity over a longer horizon.
By taking the bank’s local underwriting and converting it into a guaranteed facility within a longer-tenor structure, AGIF II effectively extends the maturity profile of African SME debt without requiring international investors to take on direct credit risk in markets they do not have the local presence to assess independently.
The 100% principal protection from originating banks is what makes that proposition palatable to development finance institutions and the commercial capital that follows them.
What the Second Close Means for Africa’s SME Financing Gap
Africa’s SME financing gap is measured in the hundreds of billions of dollars across the continent, and structures like BOMA represent one credible mechanism for closing it at scale rather than through isolated transactions.
TLG Capital’s second close, growing the fund to $120 million with 22 institutional investors and a partnership with the UK’s Manufacturing Africa programme, signals that the model has institutional credibility beyond its initial backers.
For African SMEs across the seven sectors and seven countries already in the AGIF II portfolio, and the additional companies the fund will reach as it continues to deploy toward its target, the second close means more capital available on terms that match how these businesses actually operate and grow.
For the broader impact investing and African private debt sector, it means a validated template for de-risking SME lending that other fund managers may look to replicate.
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