Agricultural Investment Funds (AIFs)

Agricultural Investment Funds (AIFs) Nomathemba Mhlanga, Ph.D. Rural Infrastructure and Agro-Industries Division (AGS) FAO-Rome Africa Finance & Investment Forum 2009 - Amsterdam, 13/15 December 2009 Presentation Outline • Agricultural investment funds: the concept • Overview of funds in the FAO/ ConCap study • Examples ofAIFs focused in Sub Saharan Africa (SSA) • Private sector engagement in AIFs • Other FAO-AGS work on supporting and promoting rural entrepreneurs • Conclusions Africa Finance & Investment Forum 2009 - Amsterdam, 13/15 December 2009 Whyan AgribusinessInvestmentFund? RISK FACTORS VALUE CHAIN PLAYERS OPPORTUNITIES Spaceforsubsidized lending &grants Lowprofits, high risk, but viable esp. with support forproductivity FARMERS,PRIMARYPRODUCERS enhancement rawmaterials Income + technology or creditsupport Spacefor SEAF-like investment funds PROCESSORS,AGGREGATORS, EXPORTERS processedgoods Reasonable and consistent returns (lessexposed to market factors than other sectors), but not extremely high returns. Spacefor SEAF-like investment funds and private sector LOCAL & INT’L BUYERS/RETAILERS Opportunities for high returns, based onbusiness strategy and ability to beat competition. Agribusiness fundfocusingon businessesthatlink farmers to globalbuyers can complete a farm-level development strategy for emerging markets. Source: Small Enterprise Assistance Funds (SEAF), 2009 Africa Finance & Investment Forum 2009 - Amsterdam, 13/15 December 2009 Overview of FAO/ConCap Study • Desk study: Stock-taking and case studies • 31AIFs identified mainly focused on SSA • Significant growth of AIFs in recent years • Majority set up as a public-private partnerships (PPPs)- 58% • Capital base ranging between US$8 million and US$2.7 billion • Varied instruments: equity(14), debt(4), debt/equity(8), guarantee(1), others (4) Africa Finance & Investment Forum 2009 - Amsterdam, 13/15 December 2009 Rising Trend in Setting up AIFs 20 18 16 14 12 10 8 6 4 2 0 <1999 1999-2006 2007-2009 Year Source: FAO/ConCap Study Africa Finance & Investment Forum 2009 - Amsterdam, 13/15 December 2009 ... - tailieumienphi.vn