Tunis, 18 May 2010- On 18 May 2010, the African Development Bank (AfDB) hosted the first meeting designed to start up the Equity and Guarantee Fund for Agriculture and Agribusiness in Africa (EGFAA), a USD 1.2 billion financial facility aimed at spearheading the African Agribusiness and Agro-industries Development Initiative (3ADI), launched in Abuja in March 2010.
The meeting gathered the members of the Task force to align goals and objectives to a defined action plan, featuring timeline, milestones and roles and responsibilities. It also aimed at getting the first set of preliminary comments on the EGFAA key features.
Launched during the High Level Conference on Development of Agribusiness and Agro Industries, the facility, which will be structured as a Fund of Funds, aims at leveraging finance and expertise to support private sector investments in agribusiness and agro-industry on the African continent. The facility will target funds operating on the whole value chain of agri-business investors, including input producers and suppliers, food producers, industries, traders and distributors, with an array of various financial instruments.
The EGFAA Task Force is composed of representatives of Commercial banks namely ECOBANK, Bank Of Industry, Standard Bank, the UN agencies FAO and UNIDO and AfDB and the World Bank on the DFIs side. Due to flight disruptions, three members from the Bank of Industry, Ecobank and FAO attended the meeting.
In his welcoming remarks, AfDB Chief Operating Officer, Nkosana Moyo underscored the strategic importance of food security for Africa, an area where the collaboration between private sector, development agencies and DFIs could best benefit from each other’s competitive advantages.
The EGFAA Task Force’s main mandate was to spearhead the launch of the EGFAA with the establishment of a strong technical platform on which the fund’s business plan and its information memorandum will be based.
In order to achieve this, the meeting focused on getting the first set of key features discussed and commented. These main items included: strategy, selection criteria, management, governance, fees and financing plan, supervision and exits.
The meeting also reviewed current activities, mapped out urgent needs, including available resources and financing gaps. The meeting enabled participants make in-depth analyses around key items and examine the major issues relating to the facility design. The main outcome was an action plan with the detailed milestones.
The task force highlighted the importance of the 3ADI facility as an opportunity to tackle escalating food prices and stimulate private sector investment in agriculture. It recommended that the facility design, for the most part, should be market led with actions being fairly rapid performance-oriented with adequate flexibilities in processes and procedures in order to ensure fast results. The Task Force is to meet again on 5 July 2010.