New AfDB agriculture fund launched to help investors

Tomato farmers that receive support from the U.S. Agency for International Development's agriculture productivity program in Tanzania. Photo by: Fintrac Inc. / USAID / CC BY-NC

A new agriculture funding facility aimed at helping private investors prepare better proposals and essentially increase their chances of securing financing will be unveiled on Thursday in South Africa.

The Agriculture Fast Track Fund, backed by the African Development Bank, the U.S. Agency for International Development, Sweden and other donors, will initially cover six countries in Africa, including Burkina Faso, Cote d’Ivoire, Ethiopia, Ghana, Mozambique, and Tanzania.

Under the scheme, to be launched at the World Economic Forum on Africa in Cape Town by AfDB President Donald Kaberuka, USAID Administrator Rajiv Shah and Swedish development minister Gunilla Carlson — investors are provided grant money to hire consultants who can help them prepare sound investment plans like feasibility studies, market research, and engineering designs, among others.

Armed with better-prepared proposals, the investors can thus clinch easier access to financing facilities and “advance a pipeline of bankable food security projects that support Africa’s agriculture transformation agenda,” USAID’s Africa Bureau said in a 2012 presentation.

In the end these “fast tracked” projects, USAID noted, will have an easier time securing early stage equity and debt financing from concessional investors.

“Projects developed out of the facility will be especially attractive to new agriculture financing windows such as the Global Agriculture and Food Security Program private sector window and AfDB’s forthcoming fund-of-funds ‘Advance Africa,’” USAID said in its report.

This new funding facility is the latest in a list of programs focused on encouraging the private sector to invest in food security in Africa.

Last year, G-8 nations launched its New Alliance for Food Security and Nutrition, a commitment aimed at mobilizing private capital, taking innovation to scale and managing risk. The alliance proved to be effective in countries like Ghana and Tanzania.

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    John Alliage Morales

    As a staff writer, John Alliage Morales covers the Americas, focusing on the world's top donor hub, Washington, and its aid community - from Capitol Hill to Dupont Circle, Foggy Bottom to the downtown headquarters of USAID, the World Bank and Millennium Challenge Corp. Prior to joining Devex, Alliage worked for a variety of news outlets including GMA, the Philippine TV network, where he conducted interviews, analyzed data and produced in-depth stories on development and other topics.

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