AfDB approves €10 million equity investment in Moringa Private Equity Fund
On Wednesday, October 1, 2014 in Abidjan, the Board of Directors of the African Development Bank approved a €10-million equity investment in the African compartment of the Moringa Private Equity Fund.
Moringa will invest in scalable, replicable agroforestry projects in Sub-Saharan Africa and Latin America. The Fund will invest in projects that combine plantation forestry (producing biomass, fuel wood or timber) with agricultural elements (producing staple food crops for local markets and/or niche export crops) to capture most of the value chain. The Fund will also be associated with a grant-based Technical Assistance Facility.
Sponsored by La Compagnie Benjamin de Rothschild (CBR) and ONF International (ONFI), the international subsidiary of the French Office National des Forêts, the Fund will benefit from CBR back-office and investment platform, while ONFI contributes agroforestry technical expertise and regional presence in the Fund’s targeted geographies.
The Moringa investment strategy is well aligned with the African Development Bank’s Ten-Year Strategy (2013-2022), focusing on inclusive green growth as the pathway to sustainable development and creating broad-based prosperity, as well as the Bank’s Climate Change Action Plan, which aims to make investments to reduce the continent’s vulnerability to climate change. This strategic fit should allow the Bank to provide a significant boost to Moringa’s operations via its high public profile, sector expertise and network across the African continent.
Agroforestry generates a strong and diversified platform for the development of forestry sector businesses, whilst also paying attention to the need for agricultural production. Smallholders benefit from an income diversification supported by an investor with a long time horizon. The Fund will drive better land management, higher and more sustainable income for local populations, and a positive environmental impact on carbon storage, soil/water management and biodiversity. By investing in sustainable agroforestry solutions, the Fund will assist Governments in meeting their adaptation and mitigation targets.
The African Development Bank will provide an equity investment of up to €10 million to an African-based vehicle, which has been established for investments located in Sub-Saharan Africa. The Bank’s investment brings total commitments to Moringa to almost €70 million and, as the first investor from the African continent in the fund, provides further validation of the fund’s African strategy and prospects as the fund enters the final fundraising phase.