Tunis – 28 January 2009 - The Board of Directors of the African Development Bank (AfDB) Group approved an equity participation of USD 15 million to finance an Agribusiness Investment Fund (Agri-Vie Fund MPCC). Agri Vie is a private equity fund that makes equity and equity-related investments in agribusiness companies in Sub-Saharan Africa (SSA). The Fund will seek investments in commercially attractive agribusiness projects with sound environmental and social practices. They should have significant economic and social impact on the communities living in the project areas and should maintain high standards of governance and transparency.
Agri Vie will actively seek out projects that promote regional integration, which is another priority for the Bank. Apart from the developmental spin-offs resulting from such investments, there is an additional benefit to the investment program from a country risk diversification perspective. Agri Vie is currently considering a couple of projects with a regional integration dimension.
The Fund is well aligned with the AfDB Strategy Papers which seek to promote agriculture and rural development through technological and financial support. The AfDB supports initiatives that will improve food security and reduce the impact of the current food crisis. The project will help to promote regional integration initiatives and to reach SMEs that generally have limited access to capital.
The Fund is also in line with the Bank’s Private Sector Operations strategy and business plan for 2008-2010, in seeking to support sectors that will have a strong impact on economic growth and poverty alleviation as well as regional integration. In this regard, the Bank seeks to participate in equity funds with a regional focus rather than single-country funds.
Agri Vie’s intervention will seek to encourage entrepreneurship and local business ownership directly, as well to create forward and backward linkages associated with a stronger private sector. Local business ownership is considered an important factor in the sustainability of economic growth and development. A key target group is outgrower farmers. Under the outgrower scheme, a strategic company will provide training and technology transfer to these farmers. The Fund will seek to replicate such models. Agri Vie will promulgate best practices in corporate governance and environmental sustainability by requiring portfolio companies to adhere to international standards.
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