Partnership with the Africa Agriculture SME Fund (AAF-SME)
The CFC invested into the AAF-SME fund, which supports private sector companies that implement strategies to enhance and diversify food production and distribution in Africa by providing equity or quasi-equity funding while strengthening their management as well. The AAF-SME fund provides finance to enterprises active in the primary, secondary and tertiary sector along the agricultural value chains in Africa between USD 150,000 to 4,000,000.
The AAF-SME Fund supports private sector companies that implement strategies to enhance and diversify food production and distribution in Africa by providing financial resources and strengthening their management. AAF-SME Fund is Africa’s first Impact Investing Fund with a focus solely on food-producing and processing Small and Medium Size Enterprises (SME) throughout the continent. SMEs active in the African agricultural sector offer significant growth opportunities and have an important impact on economic development and job creation and are therefore widely seen as a game-changing catalyst for economic development of Africa. AAF-SME investments seek to demonstrate that investments in the African agricultural SME sector is a commercially viable proposition with associated manageable risks.
AAF-SME is being complemented through a Technical Assistance Facility (TAF) that provides grant funding for complementary projects to strengthen the developmental aspects of individual investments with an emphasis on the establishment of outgrower schemes.
Beginning of 2020, the fund was fully invested in seven different agricultural SME’s across Sub-Saharan Africa (SSA) that focus on different value chain segments, from mixed farming operations to organic fertilizer production. AAF-SME are actively assisting their portfolio companies to follow individually developed business growth plans. Since AAF-SME Fund is scheduled to close in 2022, the fund successfully sold one portfolio company and several investments are preparing for exit from AAF-SME to private investors.
Through its investments, the AAF-SME fund continues to support 450 jobs of which 94 are occupied by female employees and strengthens commercial relations of 7,150 smallholders with AAF-SME funded companies, who source their raw materials for processing.
Project overview CFC-2013-02-0084 FA
|Project type:||Regular Project||Project:||AAF SME Fund|
|Commodity:||Partnership||CFC Financing:||USD 2,000,000 (equity), and USD 100,000 (as a grant)|
|Country:||Africa||Cofinancier||Other main investors included the Agence Française de Dévéloppement (AFD), PROPARCO, the Spanish Government (AECID), and the African Development Bank (AfDB)|
|Form of finance:||Equity||Target Impact Indicators:||