Incofin IM, KfW, BMZ launch US$46.6m Agri-Finance Liquidity Facility targeting African farmers

AFRICA – Covid-19 disrupted global food systems, testing the resilience of farmers who already receive the least value for their contributions to agri-food value chains.

To this end, the leading international impact fund manager, Incofin IM has partnered with German state-owned development bank KfW and Federal Ministry of Economic Cooperation and Development (BMZ) to launch an emergency liquidity facility to finance smallholder farmers in developing countries.

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The Agri-Finance Liquidity Facility (ALF) with a size of EUR 40 million (US$46.6m), is a debt facility investing in sustainable agri-enterprises mainly in Africa and Latin-America.

It will be funded by KfW and BMZ and managed by Incofin IM as the Alternative Investment Fund Manager.

According to Incofin, the facility will support actors in the sustainable agri-food value chain to maintain their operations during and after the Covid-19 crisis.

The capacity for investments has been extended to other agri-finance lenders and their investees in order to be as broad and inclusive in its impact as possible.

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The Agri-Finance Liquidity Facility (ALF) has a size of EUR 40 million (US$46.6m).

To offset the pandemic’s negative impacts on the sustainable agricultural production sector, KfW approached Incofin IM to develop a proposal for an emergency liquidity facility initially targeted for investees of the Fairtrade Access Fund (FAF).

After reviewing the proposal, it was jointly decided to expand the focus of the facility to other agri-finance lenders, principally members of the CSAF (Council of Smallholder Agricultural Finance), and their investees to be as broad and inclusive in its impact as possible.

“This will allow the facility to be as much inclusive as possible and to generate further impact,” said Incofin IM.

Earlier in the year, the fund manager partnered with Danone, French multinational food-products corporation to jointly invest in businesses providing access to clean water in Africa and Asia.

The partnership entails pooling capital from major investors to invest in innovative water businesses that provide affordable and safe drinking water to underserved populations to catalyse further growth for the entire water sector.

Some of the targeted water businesses include decentralized solutions such as water kiosks, which deliver safely treated drinking water in gallons to the home or to the local store.

The investments will also be made in water pipes and water technologies.

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