Finance and Investment in Agricultural Development
FOOD SECURITY:
A BUSINESS OPPORTUNITY
Tough challenges for Investors in Agriculture
and Agribusiness in Africa
Finance and Investment in Agricultural Developmen...
Pillars of intervention at the AfDB for
2011-2014
Finance and Investment in Agricultural Development – Kampala – October 5...
AfDB Private Sector in Agriculture and
Agribusiness
Finance and Investment in Agricultural Development – Kampala – October...
Investing Capital in Agriculture :
The case of African Agriculture Fund
Finance and Investment in Agricultural Development...
AAFStructure
Changing dynamics
Finance and Investment in Agricultural Development – Kampala – October 5, 2010
 In the past year, despi...
The case of the Equity and Guarantee Fund
of Funds
Finance and Investment in Agricultural Development – Kampala – October ...
The case of the Equity and Guarantee Fund
of Funds (EGFAA)
Finance and Investment in Agricultural Development – Kampala – ...
EGFAAStructure
Finance and Investment in Agricultural Development – Kampala – October 5, 2010
In summary
Finance and Investment in Agricultural Development – Kampala – October 5, 2010
 Structural challenges (low pro...
Contacts
Finance and Investment in Agricultural Development – Kampala – October 5, 2010
Mouhamadou NIANG
Manager
Industrie...
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Session 3 i mohamadou niang af db

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Session 3 i mohamadou niang af db

  1. 1. Finance and Investment in Agricultural Development FOOD SECURITY: A BUSINESS OPPORTUNITY
  2. 2. Tough challenges for Investors in Agriculture and Agribusiness in Africa Finance and Investment in Agricultural Development – Kampala – October 5, 2010 High Risk/Low Returns Perception: weakened access to finance Low productivity/ Low margin Broken Value Chain Market inefficiencies/ Barriers to trade
  3. 3. Pillars of intervention at the AfDB for 2011-2014 Finance and Investment in Agricultural Development – Kampala – October 5, 2010  Our overall objective:  Increase agricultural productivity,  Enhance food security  Conserve natural resources  By increasing focus, selectivity and innovation both on public and private sector sides  Public sector focus on agricultural infrastructure and natural resource management  Private Sector focus on innovative mechanisms that support Impact investing across the value chain
  4. 4. AfDB Private Sector in Agriculture and Agribusiness Finance and Investment in Agricultural Development – Kampala – October 5, 2010  Drivers: Credit, Liquidity and Interest Rate  Transfer of Skills and technologies  AfDB provides capital (debt, equity, guarantees) and finance trade in two ways:  General Financial intermediaries: Lines of credit, partial credit guarantees schemes and generalist private equity funds.  Agriculture and Agribusiness focused projects and funds such as trade finance, debt finance, private equity funds.
  5. 5. Investing Capital in Agriculture : The case of African Agriculture Fund Finance and Investment in Agricultural Development – Kampala – October 5, 2010  An Equity Fund focused on agriculture and agribusiness which provides equity across the full agricultural value chain;  Size at first closing: USD 150 million in investments, with projected return at 12%, and USD 14 million in Technical Assistance to guarantee high development impact;  Innovative mechanism: first-loss taking mechanism achieved through a PPP.
  6. 6. AAFStructure
  7. 7. Changing dynamics Finance and Investment in Agricultural Development – Kampala – October 5, 2010  In the past year, despite sector specific challenges, but encouraged by effective reforms, we have seen an increased number of request for financing from Agriculture and Agribusiness focused equity and guarantee funds that :  Are professionally managed;  Aim at investing in the whole value chain  Attract institutional investors with acceptable although lower projected returns but sizeable social returns.
  8. 8. The case of the Equity and Guarantee Fund of Funds Finance and Investment in Agricultural Development – Kampala – October 5, 2010  A Fund of Funds which aims at providing equity and debt financing to investment funds focused on Agriculture and Agribusiness  The target size is between 750 million USD to 1 billion USD aiming to provide financing or guarantee scheme to 10-15 sub-funds.  The geographical area comprises the 5 African Sub regions
  9. 9. The case of the Equity and Guarantee Fund of Funds (EGFAA) Finance and Investment in Agricultural Development – Kampala – October 5, 2010  Preference will be given to funds investing in agricultural infrastructure, or with a pipeline that covers the whole food value chain  The Fund of Funds will be managed by professional fund managers who will be selected based on their investment skills AND their proven track records in managing Technical Assistance program and SRI initiatives.
  10. 10. EGFAAStructure Finance and Investment in Agricultural Development – Kampala – October 5, 2010
  11. 11. In summary Finance and Investment in Agricultural Development – Kampala – October 5, 2010  Structural challenges (low productivity/low margin, dislocated value chain, market inefficiencies) have contributed to the high risk perception of potential investors in agriculture and agribusiness;  Despite these challenges, and in favor of effective private sector reforms, there is an increasing number of funds and projects focused in Agribusiness and Agriculture  We believe that the Fund of Funds for Agriculture and Agribusiness will ease access to investors and donors funding and help transform the challenges of financing agriculture in Africa into sustainable opportunities.
  12. 12. Contacts Finance and Investment in Agricultural Development – Kampala – October 5, 2010 Mouhamadou NIANG Manager Industries and Services Division Private Sector Department African Development Bank +216 7110 2662 M.Niang@afdb.org www.afdb.org

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