A new partnership between a U.S. government agency, a World Bank Group member and a private equity fund plans to help about half a million small-scale farmers boost yields and improve food security in sub-Saharan Africa.
The U.S. Overseas Private Investment Corp. and the Multilateral Investment Guarantee Agency announced Monday that they would create a $350 million political risk facility to support agribusiness investments in sub-Saharan Africa.
OPIC will provide the political risk coverage and MIGA will take on 60 percent of the risk of each investment made by the Silverlands Fund, a private equity fund that focuses on agribusiness in several sub-Saharan African countries.
“We are helping Silverlands to mobilize and deploy critically needed new private investment in sub-Saharan Africa’s agricultural sector,” said John Moran, OPIC’s vice president for insurance, in a statement.
The risk coverage is provided under terms and conditions that are preagreed and then tailored to specific investments.
Facilities, like this one — which help reduce risks from political violence, corruption and currency issues — can boost private equity investments in key sectors in emerging and frontier markets.
“We’re very excited about this partnership with OPIC that allows us to further our support to sustainable investments in sub-Saharan Africa’s agricultural sector — an area that is essential for the region’s prosperity and food security,” said MIGA Executive Vice President Keiko Honda in a statement.
The Silverlands Fund plans to reach 500,000 farmers in the next 10 years by investing in agribusinesses that work in parts of the fruit, grains, soy, sugar, poultry and livestock value chains. Those businesses will serve as hubs for local farmers to provide a market, technical assistance and education.
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About the author
Adva Saldinger@AdvaSal
Adva Saldinger is a Senior Reporter at Devex where she covers development finance, as well as U.S. foreign aid policy. Adva explores the role the private sector and private capital play in development and authors the weekly Devex Invested newsletter bringing the latest news on the role of business and finance in addressing global challenges. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.
