AFRICA – The African Development Bank (AfDB) has approved a US$113.42 million partial credit guarantee for the development of commercial agriculture projects across the continent.
In a statement, AfDB said the funding will be disbursed into various countries through the African Agriculture Impact Investment Limited, a Mauritius-based company.
“It will be authorised to operate in various African countries through a special purpose entity that will include two other active portfolios worth €62.5 million,” said the regional bank.
The move seeks to catalyse additional financing from international pension funds through an Agri-linked Note to facilitate investments in sustainable farmland and agricultural infrastructure across Africa.
According to the bank, the investment targets 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.
The package comes with strong social, environmental and economic development impact including the generation of over 8 000 jobs with significant involvement of women and youth across African nations.
“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,” the Bank said.
Atsuko Toda, Director Agriculture Finance and Rural Development, said “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.”
The project was also in line with AfDB’s strategic priority for Agricultural Transformation in Africa as it was envisaged to contribute to the expansion of agricultural finance and in increasing food productivity, import substitution, and value addition on the continent.
This adds to the bank’s financial commitments in the continent’s agriculture sector after it recently unveiled US$ 3.39 million funding for 17 new agri-small and medium enterprises as part of its transformative support for food security, income enhancement and job creation in Africa.
Increased sustainable investments in the agriculture sector has been viewed as a major driver towards repositioning Africa as a net exporter of agricultural commodities, potentially replacing imports worth U$110 billion.
With the value of Africa’s agribusiness sector expected to reach US$1 trillion by 2030, the continent is also projected to potentially double its market share for select processed commodities.
