African Agriculture Fund First Closes On US$135 Million
Thursday, December 23, 2010
The African Agriculture Fund (AAF), a private equity fund designed to respond to the food crisis that severely impacted the continent in 2008 in the wake of escalating food prices, reached its first closing at US$ 135 million in November 2010.
AAF investment thesis primarily lies in food production, processing and distribution in cereals, livestock farming, dairy, fruit and vegetables, crop protection, logistics, fertilizers, seeds, edible oils, smallholders and agri services. To achieve optimal diversification within the sector, the Fund will invest across the value chain (from primary production to processing and tertiary services) and pan-Africa. The Fund will make investments of up to US$ 20 million per Portfolio Company, targeting entities with robust management and growth prospects. The Fund aims to support private sector companies that implement strategies to enhance and diversify food production and distribution in Africa by providing equity funding including strengthening the management and modernisation of the agricultural sector on the continent.
To enhance its impact on development, the Fund has deployed two powerful instruments: a dedicated SME sub fund of a target size of US$ 60 million (initially US$ 30 million) and a Technical Assistance Facility (TAF) of €uro 10 million, to support outgrower schemes in large companies and business development services in SMEs.