Financial Mechanism

in support of

African Agribusiness and Agro-industries Initiative (3ADI)

Structure

• Focus along the segments of the agribusiness value chain

• Cluster of funds– Geographic region, segmented– For instance, one fund to target SMEs and micro-finance; one to target large

agribusinesses– Each fund will include equity and guarantee/risk sharing components

• Each fund will be managed by a professional fund manager

• Role of DFIs, commercial banks and governments is to ensure that these funds are capitalized adequately at each closing and defining investment criteria

• In addition to the proposed private sector facility, a framework for funding support to governments is being proposed on a bilateral basis

Implementation

• 20% ($0.3 bn) will be equity• 80% ($1.2 bn) will be guarantee fund • 10% guarantee for first loss

• With a multiplier of 10 times: $12 bn• 2 cycles of 18 months over three years

• $24 bn over three years• Half of the capital ($750m) would be sought from DFIs, countries

and other partners; half would be raised by the individual fund managers

Bidding process to select fund managers

• Transparent• Ability to raise capital for funds• Ability to define criteria for fund manager to meet• Oversight through Advisory Board

This structure can be replicated at all levels, including national

Advantages

Size: $1.5 billion

Timeline

• Subject to approval of this proposal, a task force of seven members will be set up to build the business plan

• Business plan will define criteria for regional funds

• Internal approvals for seed capital

• Target: launch first bidding in 9 months

Pilot program – after process of monitoring, envisaged that a larger (circa $5 billion) facility will be set up

THANK YOU!

For more information and follow-up, please check

WWW.HLCD-3A.ORG

3ADI