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Unlock, accelerate and leverage sustainable agriculture finance

Reducing poverty (SDG1) and hunger (SDG2) while promoting inclusive growth (SDG8) requires substantial investment in agriculture, particularly in rural areas and in those countries with the greatest needs. As the most vulnerable populations live in rural areas, investing in small-scale farming brings direct benefits to the local socioeconomic situation and reduces its dependency on external assistance.
Greater efforts are needed to reduce the financing gap in lending to smallholder farmers and agricultural SMEs. An estimated 270 million households in Asia, sub-Saharan Africa and Latin America rely on smallholding farming for their subsistence. A lack of adequate land, infrastructure and skills means that more than EUR 200bn in agriculture and non-agriculture finance is required to meet the growing need.
The latest data suggests that currently only 30% is financed. The EU has played a major role in developing innovative instruments, approaches and structures for offsetting risks and creating fresh ways for further private capital to contribute to agricultural finance.

Launched in 2018, EDFI AgriFI – the Agriculture Financing Initiative – is an innovative, inclusive impact investment facility for supporting access to finance for agri-SMEs and smallholder farmers. The facility is funded by the European Union. Total size of the AgriFI facility is 120million euros earmarked as follows:

• AgriFI global: EUR 30m to provide medium- to long-term financing for private sector enterprises active in the agri-food value chain across the OECD DAC list.
• The AgriFI-Ghana Country Window of EUR 10m is part of a holistic strategy by the Government of Ghana and the EU to support the modernisation of Ghanaian agri-food systems in the five northern regions and beyond with an overall focus on seven high potential crops.
• The AgriFI-Tanzania Country Window of EUR 12m is highly tailored by the EU Delegation based on recommendations from the government to focus on value nationally important value chains such as tea, coffee and horticulture.
• The AgriFI-Sri Lanka Window of EUR 8m is part of a larger EU action to support the agriculture sector and will provide access to finance for agri-food businesses with a focus on organic agriculture and the development of the cold chain and food processing, thereby contributing to the reduction of food waste and post-harvest losses.
• The AgriFI-ACP Regional Window of EUR 50m aims to provide long-term financing to exemplary projects in the member countries of the Organisation of African, Caribbean and Pacific States (OACPS), with an emphasis on women and youth, to participate fully in the transformation and modernisation of the agricultural sector and contribute to the preparedness of the sector to the impacts of climate

Empowering smallholder farmers in developing countries

EDFI AgriFI targets existing private sector enterprises working with smallholder farmers on financially, environmentally and socially sustainable projects with potential to scale.

It aims at supporting the “missing middle” companies focused on agriculture that need financing to grow but have difficulty obtaining financing from local commercial banks and international investors.

EDFI AgriFI will support the increase of yields at affordable rates and help raise farmer incomes. Increased farmer income and adherence to the highest environmental and social standards will support sustainable supply chains that create additional employment, improve food security and enhance environmental and social practices.

EDFI AgriFI is managed by the EDFI Management Company, a company established by the 15 European Development Finance Institutions.

EDFI AgriFI annual report 2022