AgriFI invests 5 million EUR in the Incofin Fairtrade Access Fund
10 April 2019
AgriFI, an EU-funded facility launched in 2018 to accelerate sustainable investments in developing countries while focusing on smallholder inclusiveness, has signed its first investment. AgriFI will subscribe up to EUR 5 million in long term equity in the Fairtrade Access Fund (FAF), an open ended debt social and environmental impact fund advised by Incofin Investment Management.
The Fairtrade Access Fund was started with the cooperation and support of Fairtrade International, Grameen Foundation USA, KfW and Incofin cvso. The Fund’s objective is to contribute to the development of fair and sustainable agriculture sectors by addressing the financial and operational needs of smallholder farmers, agri-SMEs and agri-focused financial institutions.
Since FAF’s inception in 2012, it has disbursed more than USD 184 million through 196 investments. The Fund has impacted the lives of more than 254,000 smallholder farmers and 51 investees in 18 countries throughout Africa and Latin America, with specialties in 11 different crop types. Approximately 55,000 end women clients have been serviced, 240,000 hectares of land sustainably cultivated and 2,600 smallholder farmers trained on good agricultural practices. With the FAF Technical Assistance Facility (TAF), 54,181 smallholder farmers have been reached throughout 10 different countries. The TAF aims to address challenges related to agricultural finance by mobilizing grant funding to provide the technical support necessary to improve productivity, reduce diseases and increase market accessibility.
As a long-term investor, AgriFI will invest EUR 5 million in Class A equity to support the Fund, currently USD 51 million in size. The additional contribution will expand the Fund’s capabilities to meet the short and medium term financing needs of smallholder farmers.
Aude Sauvaget, Investment Officer, who led the transaction for AgriFI, “AgriFI is proud of its first investment to fund the growth of the Fairtrade Access Fund. It will support an increase of its operations mostly in Africa and of its long-term loan portfolio. By supporting the Fairtrade Access Fund, AgriFI will contribute to provide smallholder farmers with better access to capital, particularly long-term capital which is key to add value and increase their quality of life.”
Dimitry Van Raemdonck, AgriFI Manager, complements, “This first investment is a fantastic opportunity for AgriFI to promote sustainable smallholder farming in developing countries. The FAF developed a solid expertise in supporting farmers’ organizations. It creates value for the farmers by promoting certification schemes and offering well suited financial solutions and technical assistance. By providing long term financing, we are convinced that AgriFI will help the Fund to scale up and improve the living conditions of many more farmers.”
David Dewez, Incofin Investment Management Agro Fund Manager, said “AgriFI’s decision to support the Fairtrade Access Fund is a key milestone in the development of the Fund. We expect the entrance of AgriFI to be the catalyst to generate strong interest from other investors into this high impact fund. With this long term commitment, the Fund will be able to increase its funding to partners in different locations, therefore benefiting thousands of smallholder farmers dedicated to sustainable agriculture.”
About AgriFI and EDFI MC
AgriFI, the Agriculture Financing Initiative, is an impact investment facility funded by the EU, with a mandate to unlock, accelerate and leverage investments with a value chain approach in developing countries, focusing on smallholder’s inclusiveness and/or agri-business medium, small and micro enterprises (MSME).
AgriFI is managed by EDFI Management Company NV in close association with the 15 European Development Finance Institutions (EDFI) as well as many other like-minded investors. Find out more on www.agrifi.eu and www.edfi.eu.
About Fairtrade Access Fund
The Fairtrade Access Fund (FAF), founded in 2012, is an open ended debt fund advised by Incofin Investment Management. The Fund focuses on delivering strong social and environmental impact and is the first fully self-sustaining agri-focused fund. FAF addresses the financial needs of smallholder farmers by bridging the gap in pre-harvest financing needs and by providing long term financing with the aim to contribute to financing investments.
Impact objectives include but are not limited to improving the livelihood of over 500,000 smallholder farmers, generating over 10,000 permanent jobs, supporting over 2 million hectares of sustainably cultivated land and disbursing over USD 320 million (equivalent to >530 loans). The FAF team is also committed to developing the overall portfolio to reach USD 80 million in 2022, including increasing the African portfolio to reach a net growth >USD 10 million.
For more information please visit incofinfaf.com.
AgriFI-EDFI MC, Investment Officer
Incofin Investment Management, Managing Partner
Incofin Investment Management, Agro Fund Manager