USAID, partners establish African agricultural fund.

By bne IntelliNews September 29, 2011
Impact investors, together with the U.S. Agency for International Development (USAID), have announced an effort to invest USD 25mn of commercial capital with the only private investment manager in sub-Saharan Africa focused exclusively on growing small and medium-sized enterprises in the agriculture sector. This new fund, the African Agricultural Capital Fund (AACF), will deliver much needed growth capital to boost the productivity and profitability of Africa's undercapitalized agriculture sector, the investors said in a statement. Over the next five years, Pearl Capital Partners (PCP), a specialized African agricultural investment fund manager based in the Ugandan capital Kampala, will invest the AACF's USD 25mn in at least 20 agriculture-related businesses in East Africa, infusing equity and expertise into a sector that has suffered from under-investment, and paving the way for raising the productivity and incomes of at least a quarter of a million households. PCP's model focuses on building the skills of local management teams rather than infusing management expertise from abroad, making it a sustainable approach to investing on the continent. In order to attract investors to East Africa's agribusinesses, USAID's Development Credit Authority is guaranteeing 50% of an USD 8mn commercial loan from J.P. Morgan's Social Finance Unit to AACF. The fund is also supported by USD 17mn in equity investment from the Bill & Melinda Gates Foundation, the Gatsby Charitable Foundation, and the Rockefeller Foundation.

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