Africa-Europe Alliance: EU to contribute €45 million to boost agri-business investments and create jobs in rural areas

Africa-Europe Alliance: EU to contribute €45 million to boost agri-business investments and create jobs in rural areas

18/12/2018

In Vienna today, the European Union and the International Fund for Agricultural Development (IFAD) launched a new Agri-Business Capital fund worth €45 million. The Agri Business Capital Fund (ABC) will support smallholder agriculture by increasing access to finance for individual smallholder farmers. It is expected to attract more than €200 million in investments and benefit as many as 700 000 households in rural areas.

This Agri Business Capital Fund (ABC) will be a major blending operation designed by the EU and IFAD to benefit the agriculture sector. The EU will be contributing €45 million in funding, from the European Development Fund’s intra-ACP allocation for the promotion of the private sector, which the EU implements on behalf of the African, Caribbean, and Pacific Group of States (ACP) secretariat. The Government of Luxembourg and the Africa Green Revolution Alliance (AGRA), an international NGO, will each be contributing 5 million. The ABC Fund will invest in smallholder agriculture and address this “missing middle”, which has potential to be profitable and have a development impact but has lacked sufficient funding, partly because of the perceived risks to investors. Direct investments and small-scale loans to small and medium sized enterprises, farmers' organisation and agripreneurs will make good on the EU’s and IFAD's commitment to help smallholders access capital more easily. The Fund will build on existing IFAD development activities to screen and reduce the risk attached to subsequent investments. It is expected to attract significant additional funding from other sources – private and impact investors alike – and benefit up to 700 000 households in rural areas.

In boosting investment, improving livelihoods and creating jobs, the ABC Fund will directly deliver on the aims of the Africa-Europe Alliance for Sustainable Investment and Jobs.