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African Development Bank provides €100 Million partial guarantee for commercial agriculture in Africa
The Board of Directors of the African Development Bank, meeting in Abidjan on 29 May 2019, approved a €100 million partial credit guarantee (PCG) to the structured finance company, African Agriculture Impact Investments Ltd (Mauritius), to develop commercial agriculture in Africa.
The Mauritius-based company will leverage the Bank's PCG to catalyse additional financing from international pension funds through an Agri-linked Note to facilitate investments in sustainable farmland and agricultural infrastructure across Africa. It will be authorized to operate in various African countries through a special purpose entity that will include two other active portfolios worth €62.5 million.
The investments are expected to target agricultural assets that will support multiple value chains including but not limited to; wheat, maize, barley, sorghum , livestock, dairy, as well as diverse fruits, vegetables and nuts. It comes with strong social, environmental and economic development impact including the generation of over 8,000 jobs with significant involvement of women and youth. It will help disseminate commercial-scale agribusiness and farm operational capacity across Africa with high complementarity with small-scale farmers through technical, managerial and financial skills transfer.
“This is a landmark transaction that demonstrates the Bank’s bold actions and firm commitment to the “Feed Africa” objective by promoting food security and connecting African farms to adequate finance, skills, technology, and markets both regionally and internationally” – Atsuko TODA, Director Agriculture Finance and Rural Development, reacting to the Board’s approval.
The project is in line with the Bank’s strategic priority for Agricultural Transformation in Africa as it will contribute to the expansion of agricultural finance and in increasing food productivity, import substitution, and value addition on the continent.