Finance & Capital Market

Tawazun unit launches $190m venture debt programme for SMEs

Strategic Development Fund (SDF), the investment arm of Tawazun Economic Council, has announced the successful funding of eight supply chain contracts and three capex contracts towards 5 SMEs through its Venture Debt programme that was launched in November 2019. 
The total allocated fund for the programme is AED700 million ($190 million) with funding ranging from AED10 to 55 million for an SME. 
The programme aims to support and enable the growth of UAE national SMEs operating in strategic sectors, by providing incentivized financial solutions in collaboration with UAE banks. 
The programme has expanded its mandate to include businesses operating in the aviation industry with viable projects and added value content towards the UAE economy. 
Tareq Abdulraheem Al Hosani said: "Tawazun is proud of the advancements that SDF has already made to develop strategic technology investments and intellectual property, strengthen innovation & industrial capabilities, and actively develop SMEs and UAE national companies."
He looked forward to the added focus on the aviation sector and the enhanced incentives that SDF is implementing starting this year. 
CEO Abdulla Al Jaabari said: "SDF continually reviews and updates its mandate to address changes that occur within the marketplace and industry in the UAE. Expanding our programme towards UAE companies operating in the aviation sector will further support our mandate to enable UAE strategic industries as well as benefit from synergies with the existing sectors." 
Zeyana Salah Al Hemeiri, head of VD programme at SDF, said: "Our aim through the Venture Debt programme is to enable the private SMEs in the strategic sectors through various funding mechanisms."
"The past two years have provided us with valuable learnings about the industry and SMEs challenges, we are now exploring the provision of more incentives and creative solutions that target the specific needs of the sectors creating a more attractive and sustainable environment," he stated.
Al Hamra is a UAE company that works in the field of design, construction, system integration, customisation, and manufacturing of security support mechanisms. 
SDF’s venture debt programme provides funding to UAE-based SMEs operating in strategic sectors for the expansion of operations, development of capabilities and innovation of products and solutions. 
An example of a recent successful venture is the support provided to Al Hamra, by funding the supply chain requirement for a government contract worth more than AED 40 million. 
Al Hamra CEO Ali Al Mannaei said: "SDF has impacted Al Hamra in a very positive way. Their support has bolstered the development of Al Hamra and this has benefited not only our Armed Forces clients but also the industry in general."
"SDF has enabled Al Hamra to join a supply chain that has ultimately helped us advance our service provision to both the public and private sector," he stated.
SDF has an important role in supporting the private sector to meet the strategic needs of the UAE and aims to enable income sources; enhance self-reliance; and encourage creativity and innovation amongst local companies, enabling them to participate and play a vital role in international deals, he added.