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Brussels Briefing 54: Daniel Ohonde ''Support and finance from the private sector towards SDGs implementation''

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The Brussels Policy Briefing n. 54 on ”Sustainable agriculture: where are we on SDGs implementation?” took place on 27th February 2019 (European Commission, Charlemagne Building, Alcide de Gasperi Room, Rue de la Loi 170, 1040 Brussels).

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Brussels Briefing 54: Daniel Ohonde ''Support and finance from the private sector towards SDGs implementation''

  1. 1. AECF: CONTRIBUTING TO SUSTAINABLE AGRICULTURE PRIVATE SECTOR PERSPECTIVE
  2. 2. “We unlock the power of the private sector to positively impact the lives of rural and marginalized communities in Africa” WHAT WE DO We provide catalytic funding, advisory support and market linkages to early stage and growth stage businesses in the Agriculture, Renewable Energy and Climate Mitigation and Adaptation Technologies sectors
  3. 3. OUR CROSS-CUTTING THEMES Youth Fragile Contexts Gender “We are the leading institution in gender lens investing in Africa” “We go where no one wants to go” “We understand that youth are the drivers of the next economic revolution in Africa”
  4. 4. WE GENERATE IMPACT BY INVESTING IN GROWING BUSINESSES Supported 268 small and growing businesses across 26 countries in sub- Saharan Africa and leveraged US$ 750 million from the private sector (2018 estimate)
  5. 5. ALIGNED TO SDGS SDG Target AECF Align ment End poverty in all its forms everywhere Achieve gender equality and empower all women and girls Sustained, inclusive and sustainable economic growth, employment and decent work for all Ensure access to affordable, reliable, sustainable and modern energy for all Take urgent action to combat climate change and its impacts*  Increase household incomes  Increase food security  Invest in women owned enterprises  Increase women’s income  Invest in renewable energy  Increase jobs (youth, women & marginalized groups)  Catalyze job creation  Invest in climate smart technologies End hunger, achieve food security and improved nutrition  Increased household incomes to end hunger and improve nutrition
  6. 6. STRATEGICALLY POSITIONED TO SUPPORT SGBs IN POVERTY ALLEVIATION AECF learnings on how to address the gap  Customised and flexible interventions to widen the pool of businesses supported  Share innovation risk to catalyse industries  Provide customised technical support to overcome growth challenges and scale businesses  Link businesses to external financing for sustainability Mature Africanbusinesseshave many fundingoptions AECF’s goal is to bridge this gap across Africa Demandforfunds (# Africanbusinesses) Supplyoffunds (# investors) Early stage Growth stage Expansion Stage Mature businesses Accelerators; Foundations Incubators Angels Microfinance & VC Impact investors & Small Cap PE PE; Commercial Banks & Public Markets Small & earlystage businessesthatrequire lowerlevelsoffunding
  7. 7. Our growing portfolio and new product offering to address the Missing Middle AUM ($ mil) ≤50 ≥100 ≥200 USD10m-100m+USD2m-10mUSD100k-2m ≥1000 Dealsize OUR POSITION IN THE ECOSYSTEM
  8. 8. IN 10 YEARS, WE HAVE LEARNT HOW TO CATALYSE PRIVATE SECTOR What we have achieved Organizational capabilities 189 Agribusiness investments 79 Renewable energy investments 4 Operational bases 26 Countries 38% of investments in startups $685,000 Average ticket size Deep and broad pipeline from over 10,000 applications for funding in 31 competitions Understanding of diverse markets and regulatory environments in more than 40 value chains and 10 renewable energy technologies Understanding of early and growth stage business needs and risks and how each can help alleviate rural poverty
  9. 9. SMECashFlows Stages HIGHER RISK LOWER RISK Idea, Seed & Early (1-3 years) Early & Growth (2-6 years) Growth & Expansion (>6 years) Expansion & Maturity Maturity, Buyout & Strategic Acquisition Grants, Equity-like, Quasi-Equity, Zero – Interest Loans, TA Equity-like, Quasi- Equity, Loans, TA AECF Core AECF Connect / Exchange AECF Scale Grant & zero interest loan products for high-impact, risky companies & business ideas, and support for local BDS providers Flexible upside products to Core graduates (75%) and non-graduates that are especially impactful and do not fit Core (25%) Grants, Zero Interest Loans, TA
  10. 10. MILLIONS IMPACTED IN SUB-SAHARAN AFRICA 18 million Lives Impacted (40% women) >50% from agribusiness 11,000 People Directly Employed (60% Youth) <40% from agribusiness $ 750 million Cumulative Matching Funds Leveraged >55% from agribusiness $ 1.3 billion in Cumulative Total Development Impact >70% from agribusiness Note: Above figures are 2018 impact estimates based on projections.
  11. 11. 1. Ending Hunger: A significant part of AECF’s investment is to improve the availability of nutritious food for the very poor, either directly through increased productivity or by improving incomes. Our agribusiness portfolio has reached >9 million people, most of whom live below the poverty level of $1.90 per day. 2. Nutrition: AECF invests in seed companies producing fortified staple crops and in nutritious pulses that directly improve the nutrition at the household level. We have recently launched a new program for promoting access to improved seeds in Africa, a US$ 60 million fund (with an initial US$ 10 million) with the target to commercialise 5 seeds varieties and reach >2.5 million people in the next 5 years. SPECIFIC CONTRIBUTION TO SDG 2
  12. 12. 3. Income: AECF exists to change the way market systems work in favour of poor people, meaning both increasing productivity but increasing access to markets by linking poor farmers to markets and moving them up the value chain. In agriculture, our investment has increased household incomes by an average of $140. We invest in companies that improve productivity by making better inputs available through smaller package sizes and local distribution networks. We improve access to markets by grouping farmers together as outgrowers and innovating information systems to link farmers to markets. Meru Greens (our investee) works with 10,000 smallholder farmers in Kenya who grow green beans and other crops for processing and export to European and Middle Eastern markets improving incomes by $350 per year – the cost of sending a child to secondary school. SPECIFIC CONTRIBUTION TO SDG 2 (CONT.)
  13. 13. 4. Resilience and adaptation to climate change: AECF has a programme in Kenya that specifically focuses on surfacing business ideas that support smallholder farmers become more resilient to the effects of climate change – this includes new crops for dryland areas – moringa, croton nuts (biodiesel), eri caterpillars (silk) – new varieties of existing crops – drought tolerant maize, climate appropriate pulses, improved dryland crops such as sorghum and millet – new services – weather insurance, farmer information services – and new technologies – drip irrigation, solar pumps 5. Preservation of genetic diversity: AECF has supported small and medium sized seed companies to commercialise indigenous varieties of grains and pulses that are otherwise not interesting to the global seed giants. We fund efforts to breed these genetics into climate and culturally appropriate seeds that can be grown by small farmers for local consumption. Our investments in seed companies reached over 700,000 households last year. AECF invested in Naseco from Uganda to expand into DRC and Burundi, establishing local production for improved varieties of maize and beans. Incomes for over 33,000 farmers have increased by $109 along with improved household food security in an area suffering conflict. SPECIFIC CONTRIBUTION TO SDG 2 (CONT.)
  14. 14. CLICK TO EDIT MASTER TITLE STYLETHANK YOU

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