AfDB Office in Uganda Receives delegation from Sanlam Private Equity and Strategic Partners Ltd. of South Africa
Messrs. Pieter Kriel, Chief Executive Officer, Sanlam Private Equity and Herman Marais of Strategic Partners Ltd, South Africa, paid a working visit to UGFO on 9 May. Both sides exchanged ideas on the prospects of establishing an agribusiness equity investment fund, to be known as "Agri-Vie", in East Africa. The proposed US$ 100 million fund will make equity investments in agribusiness companies in Sub-Saharan Africa and will be managed by AA Fund Managers incorporated in Mauritius. AfDB has been invited to provide equity of US$ 15 million for the fund. Mr. Pieter Kriel explained that the fund would focus on smaller transactions ranging from US$ 3–7 million per company and its main market would be South Africa. The company would, however, extend its activities to other Sub-Saharan African countries in which there is demand. The visitors were particularly interested in finding out about the size and type of demand for agribusiness-related equity instruments in the Ugandan market. The AfDB Uganda Office Resident Representative, Mukaila Ojelade, welcomed the delegation to Uganda and pointed out that the proposed fund would contribute positively to the development of the agribusiness sector and economic prosperity of the region through job creation, food security, income generation and poverty reduction. He further observed that the fund would create an additional window for the Bank to provide funding for small to medium scale agribusiness development projects. He said there were solid market prospects for the fund in East Africa as most available funds were of a short-term nature and are not suited to agribusiness operations. Mr. Ojelade said the main risks around the venture included limited exit options and weak commercial arbitration systems. These would need to be adequately addressed in the strategic planning of the Fund, he said. It was agreed that the fund’s promoters would work closely with the Uganda office in identifying potential investors in Uganda and sharing relevant information.