The Business Development Bank of Canada’s venture capital arm on Thursday committed to invest $10 million in a regional venture capital fund, bringing the federal government’s seal of approval to the initiative and raising the total funding to $47.5 million.

Senia Rapisarda, vice-president of strategic initiatives and investments with the bank’s venture capital arm, said the federally owned bank has been working on a plan to help the ecosystem for investment across the country by backing venture capital funds.

In most cases, the bank requires a dominant backing by private investors before it invests in a fund, but it made an exception for the Atlantic fund, whose investment comes mainly from provincial governments.

“We saw a lot of promising signs in Atlantic Canada,” Rapisarda said in an interview.

“We said we need to have a top team (managing the fund) and if we have that top team, we’ll come in.”

Nova Scotia and New Brunswick initiated the regional venture capital fund, which still needs a name, to provide follow-on funding for some of the exciting startups sprouting up around the region.

Nova Scotia and New Brunswick have provided $15 million each, Prince Edward Island has kicked in $2.5 million and privately owned Technology Venture Corp. of Moncton has thrown in $5 million.

Patrick Keefe, the vice-president of investments at Innovacorp who was appointed fund manager in the fall, said Thursday he has identified another individual to help manage the venture capital operation.

Keefe hopes for a first closing in January, meaning that the parties who committed money can place it in the fund. The operation can then open an office and begin to consider investment targets.

But Keefe will also leave the door open to further investment, and other parties, most likely from the private sector, could come in for the second close. The organizers are hoping for a final tally of $50 million to $60 million.

Rapisarda said Keefe impressed the bank because he can relate well to entrepreneurs and deal with the complicated matters involved in running a fund.

“He is also one of the few people who can tackle a general fund,” she said.

Rapisarda said Keefe is comfortable working with information technology, life sciences and clean-tech companies.

The bank investment brings BDC Venture Capital back to the Atlantic region for the first time since it closed its Halifax office four years ago.

Two of the last investments it did in Atlantic Canada were in social media analytics startup Radian6 and security software maker Q1 Labs, both of New Brunswick. Both were stellar ventures that were recognized as deals of the year by Canada’s Venture Capital and Private Equity Association.

The bank has noticed the excitement about startups in the region. The bank’s investment was negotiated by Dominique Belanger, a director in the strategic investments and initiatives division, who has visited the region frequently in the past two years, participating in Invest Atlantic and MentorCamp Halifax.