Whether for profit or social motives - and often both - an increasing number of investors are targeting opportunities in African agriculture. At the same time innovative approaches for deploying aid to support farming businesses linked to smallholders are emerging. This blog provides a snapshot of who is doing what, where and how.

1 December 2010

African Agriculture Fund reaches first closing at $135 million

The African Agriculture Fund (AAF), a private equity fund designed to respond to the food crisis that severely impacted the continent in 2008 in the wake of escalating food prices, reached its first closing at US$135 million in November 2010.

AAF investment primarily lies in food production, processing and distribution in cereals, livestock farming, dairy, fruit and vegetables, crop protection, logistics, fertilisers, seeds, edible oils, smallholder and agri services.

To achieve optimal diversification within the sector, AAF will invest across the value chain, from primary production to processing and tertiary services. The fund will make investments of up to US$20 million per portfolio company, targeting entities with robust management and growth prospects.

AAF aims to support private sector companies that implement strategies to enhance and diversify food production and distribution in Africa by providing equity funding, as well as strengthening the management and modernisation of the agricultural sector on the continent.

To enhance its impact on development, AAF has deployed two powerful instruments: a dedicated SME sub-fund of a target size of $60 million (initially US$30 million) and a technical assistance facility (TAF) of €10 million, to support outgrower schemes in large companies and business development services in SMEs.

Full article from News Day