Agri-Business Capital Fund receives $2.5 million AGRA boost

The Alliance for a Green Revolution in Africa (AGRA) has invested its second tranche of $2.5 Million to boost the share capital of the Agri-Business Capital Fund (ABC Fund).

The ABC Fund is an innovative initiative by AGRA, the European Commission through its EU-ACP agreement, the Luxemburg Government and the International Fund for Agricultural Development (IFAD) to support sustainable and inclusive agricultural value chains for smallholder farmers and small-to-medium sized rural agribusinesses (SMEs) in developing countries.
“ABC Fund is a global facility but 80% of the investments will be made in Sub Sahara Africa,” said Hedwig Siewertsen, the Head Inclusive Finance at AGRA.

 

“AGRA’s investment in the first loss tranche of this blended vehicle only covers losses in Sub Sahara Africa. The current 10 approved investments are located in Ivory Coast, Mali, Burkina Faso, Ghana, Kenya and Uganda, and will benefit over 15,000 farmers in these countries” said Siewertsen.

The fund is composed of different types of shares with different risk and return profiles. The funds come in form of loans and equity, specifically tailored to the needs of smallholder farmers and agri-SMEs. To reach them most effectively, these products are made available either directly to farmers’ organizations and SMEs, or indirectly via financial institutions.

It focuses on investments that can drive economic and social development and generate economic opportunities for smallholder farmers, in particular women and young people, with an aim of improving livelihoods of more than 4 million individuals over the life of the fund.

In Africa, the tranche from AGRA will be used to provide loans to  agricultural SMEs that service smallholder farmers and have a business track record of minimum 3 years with a turnover exceeding USD200,000 with a financial need of more than USD 250,000 substantiated by a business plan.

It will also lend to financial intermediaries that have an agricultural portfolio targeting smallholder farmers. Such organizations can apply for the funds through the fund managers who are Bamboo Capital Partners based in Nairobi, and Injaro Investment Limited which is based in Accra and Abidjan.

Targeted entities for the funds include producers of primary agricultural products, input suppliers such as manufacturers or distributors of seeds, companies that produce, maintain or operate storage facilities, and service companies, traders, veterinarians, mechanization.

Other beneficiaries include aggregators and/or processors of primary agricultural products, logistics companies that transport and handle primarily agricultural goods, and finally, processors of secondary agricultural goods/ food products.

This is the second tranche AGRA has invested in the ABC fund. The first tranche of investment of a similar amount was done last year.

AGRA is an alliance led by Africans with roots in farming communities across the continent.

The alliance understands that African farmers need uniquely African solutions designed to meet their specific environmental and agricultural needs so they can sustainably boost production and gain access to rapidly growing agriculture markets.

For nearly 10 years, AGRA’s work across 18 countries was focused on distinct problems related to seed production, soil health, and agriculture markets that were so profound and had been neglected for so long that they required a concentrated effort to resolve. Our results have been impressive. Now, we’re embarking on an ambitious and more integrated approach in select countries.

Our vision is to catalyze and sustain inclusive agriculture transformation in Africa by increasing incomes and improving food security for 30 million smallholder households in Africa and to support countries on a pathway to attain and sustain an agriculture transformation.

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