Press and News Multi-Donor Fund Unlocks Financing for Africa's Small and Medium-Sized Agricultural Enterprises
On October 24, 2024, Norway and the United States of America - through USAID - announced that the United Kingdom and the Republic of Korea will join them as partners in a multi-donor fund: 'Financing Agricultural Small-and-Medium Enterprises (SMEs) in Africa' (FASA). The UK will provide an initial contribution of £7 million (c.$9 million). These new donor financial commitments add to the $70 million from USAID and the Government of Norway and bring FASA closer to its goal of catalyzing a total of $200 million USD in multi-donor contributions.
Originally published by Regjeringen.no /Adapted for the Alliance of Bioversity International and CIAT
Norway and USAID also announced that Investisseurs & Partenaires (I&P) – a pioneering impact investment group dedicated to financing and supporting African entrepreneurs while strengthening entrepreneurial ecosystems across the African continent – was competitively selected as the FASA fund manager. The CGIAR Hub for Sustainable Finance (Impact SF) will be its agricultural and climate partner. I&P brings a strong track record in fund management in the agriculture and food systems sector. The Small Foundation is the first philanthropic organization to make a financial contribution to the FASA investment fund and will support the Fund’s learning agenda.
The combined announcements initiate operations of the FASA Fund that could ultimately support 1,000 agri-SMEs, create and maintain over 70,000 jobs, and benefit over one million smallholder farmers over ten years. Agri-SMEs support 95% of smallholder farmers in sub-Saharan Africa, handle over 60% of all food production and trade on the African continent and create 70% of formal employment in food systems. Together with the farmers they support, agri-SMEs are the driving force behind transforming agriculture and food systems in Africa and are essential for creating a prosperous and more resilient future for all.
FASA - which was announced by USAID Administrator Samantha Power and the Norwegian Minister of International Development Anne Beathe Tvinnereim during the United Nations General Assembly in 2023 - will invest catalytic capital in funds focused on agri-SMEs across Africa to unlock business growth. The Fund is designed to help fill the estimated $100 billion financing gap in sub-Saharan Africa and unlock hundreds of millions of dollars in financing for agri-SMEs by reducing the risk of investing in agriculture - a risky sector compared to others. FASA will be providing catalytical capital to underlying investment funds that will lend to or invest in agri-SMEs across Africa. With anchoring from FASA, these investment funds will be able to attract more needed capital to serve larger numbers of agri-SMEs. USAID’s contribution is part of Feed the Future - a USA government initiative to address hunger, poverty, and malnutrition.
CGIAR’s Role in Supporting FASA’s Impact
As the agricultural and climate partner, the CGIAR’s ImpactSF plays a critical role in enabling FASA to meet its ambitious goals. ImpactSF will harness CGIAR’s scientific expertise to measure impact from the underlying investment funds, and help to advance the fund’s learning agenda to create a robust ecosystem of agriculture-focused investment funds in Africa. ImpactSF will:
- Leverage CGIAR’s research to support underlying investment funds using AI and deep learning tools for climate and environmental risk assessments, along with science-based intervention recommendations
- Build the capacity of fund managers by improving monitoring, evaluation, and reporting processes across the agri-SME portfolio to track impacts effectively
- Advance FASA’s learning agenda through a centralized impact data monitoring platform, evaluating the effectiveness of catalytic capital in achieving outcomes in food security, nutrition, livelihoods, and climate resilience
The combined expertise of I&P and ImpactSF will ensure that FASA not only bridges financing gaps but also establishes a new standard for sustainable agricultural investments, creating opportunities that transform African agriculture for the future.
Investisseurs et Partenaires (I&P) is FASA’s Fund Manager
I&P is an impact investment group dedicated to financing and supporting African entrepreneurs while strengthening entrepreneurial ecosystems across the continent. Through its fund of funds activities, I&P has supported 25 African funds to date, becoming the main backer of emerging African fund managers. With over 20 years of experience in the agri-food sector, I&P has gained hands-on expertise in 15 African markets in a diversity of value chains.
The CGIAR Hub for Sustainable Finance (ImpactSF) is FASA’s Agriculture and Climate Partner
CGIAR offers data-driven solutions and science-based evidence to help investors de-risk their portfolios by quantifying climate and environmental risks and impacts, and to enhance investment decision towards sustainable food systems. CGIAR also builds the capacity of fund managers to design robust climate and agricultural impact thesis and frameworks.
The Team
Godefroy Grosjean
CGIAR Sustainable Finance (ImpactSF) Co-Lead
Richard Newman
CGIAR Sustainable Finance (ImpactSF) Co-Lead
Ena Derenoncourt
Gender-Smart Investment Specialist, CGIAR Hub for Sustainable Finance (ImpactSF)
Sadie Shelton
Communications Specialist, CGIAR Hub for Sustainable Finance (Impact SF)Header Image Credit: I&P - Ikari Services
