AgDevCo secures $90mn in funding to further invest in African agribusiness

Global AgInvesting | 3 June 2024

Building upon the initial endowment provided by the UK government that helped establish AgDevCo, the specialist early-stage investor announced it has secured $90 million of new funding.

Broken down this includes:

~ $50 million of equity that was committed from the UK’s development finance institution (DFI), CDC Group. 

~ $20 million of equity that was committed by Norfund, the Norwegian investment fund for developing countries.

~ And $20 million of senior debt was from the U.S. International Development Finance Corporation (DFC), the U.S. government’s DFI. 

This funding is in addition to separately announced funding totaling $5.4 million from CDC, Norfund, and the UK’s Foreign Commonwealth and Development Office (FCDO) for AgDevCo’s integrated technical assistance facility. 

“This investment reinforces our long-term commitment to investing in key sectors in Africa including agriculture, which is critical for creating jobs, promoting gender equality and supporting people to build a better life for themselves and their families,” said Tenbite Ermias, managing director for Africa, CDC.

“Furthermore, it reflects our continued focus on climate finance, which is central to our new strategy over the next five-year period, to support emerging economies that are most vulnerable to the impacts of the climate emergency.”

Established in 2009, AgDevCo contributes to a vision of a thriving commercial African agriculture sector that benefits people, economies, and the environment by investing capital and providing technical assistance with the goal of growing sustainable and impactful businesses along the agricultural value chain.

In the process of pursuing this mission, AgDevCo stated that it aims to promote resilience, gender equality, and the production of higher-quality and more nutritious food. 

“Norfund is very pleased to partner with AgDevCo to deliver on our joint mission: to create jobs and improve lives by investing in businesses that drive sustainable development,” said Ellen Catherine Rasmussen, executive vice president of scalable enterprises, Norfund.

“A thriving commercial African agriculture sector is vital for economic growth and job creation. More than half of sub-Saharan Africa’s population work in agriculture, yet Africa does not produce enough food to feed the continent. The investment in AgDevCo will create jobs, increase food production, improve climate change resilience, and promote gender equality. The AgDevCo team’s skills, networks and achievements are impressive – and we look forward to working with them.”

The original foundational endowment enabled AgDevCo to provide capital to agribusinesses that have directly created or sustained more than 15,000 jobs and have worked with 75,000 smallholder farmers to increase their income and their resilience to climate change. 

It also allowed AgDevCo to build the capability and track record putting it in the position to attract outside investment capital.

Now with this latest investment, AgDevCo stated it will continue to grow its investment activities across sub-Saharan Africa. 

“Securing investment from CDC, Norfund, and DFC is a major milestone in AgDevCo’s history,” said Keith Palmer, founder and chairman, AgDevCo. “It is a strong endorsement of AgDevCo’s team and our strategy.”

“We are excited that our vision is shared by our new funders, who recognise the important contribution that AgDevCo investments can make to productivity, sustainability, and inclusivity in Africa.”

Palmer continued, “Their funding marks the beginning of a partnership in which AgDevCo will use its sector specialism, drawing on our new funders’ networks and resources, to increase the number of impactful investments in African agriculture.”

Vicky Ford, UK minister for Africa, added her voice of support for AgDevCo’s successful decade of investment in Africa and the potential impact it can have across the continent, stating, “I am proud to see how AgDevCo’s investing has boosted sustainable agriculture across sub-Saharan Africa over the past 10 years, including deepening impact on smallholder farmers and SMEs.”

“This new investment will bring continued growth, by enabling agribusiness SMEs to expand, improve farmer incomes, create new jobs and strengthen climate resilience across Africa.”