AgDevCo to support Africa’s food systems as it secured funding for farmers. Image Credits: AgDevCo
Agriculture-specialist firm, AgDevCo, has raised $85 million in equity injection from a consortium of European development finance institutions. This funding round saw participation from British International Investment (BII), the UK developmebt finance branch which led the round, alongside Sweden’s Swedfund and Norway’s Norfund.
AgDevCo was founded in 2009 with the task of addressing African agricultural challenges like limited access to finance, climate change vulnerability, underdeveloped infrastructure, and restricted market access. So far, this has hindered its potential to feed a rapidly growing population and contribute to economic development.
AgDevCo aims to address these challenges by providing flexible, long-term capital to small and medium-sized agribusinesses in Africa. This may range from businesses involves in primary production to those in processing and logistics, with the target being businesses often overlooked by traditional lenders due to perceived higher risk and longer investment horizons.
The firm has already reported significant success with its investment model. In 2023, businesses within its portfolio provided market and income opportunities for over 2.4 million small-scale farmers, customers, and traders, with almost a third being women. The firm also claims to have directly supported over 28,000 jobs during the same period. Furthermore, AgDevCo states that for every dollar invested to date, $2.50 of additional income has been generated for rural and peri-urban households.
Roman Frenkel, Director and Head of Food, Agriculture and Natural Capital at BII, mentioned that the investment reflected their commitment to “empowering agribusinesses that are driving sustainable practices, strengthening food systems, and building economic opportunities for rural communities.”
Tomas Wadström, Senior Investment Manager at Swedfund, emphasised the importance of investing across the entire food value chain to improve resilience and adaptability within the sector. He pointed to the potential for “poverty reduction through job creation and better production capacities, including for smallholder farmers.”
Norfund’s Investment Manager, Donald Muchiri Kariuki, corroborated this point of view, noting agriculture as a “cornerstone for fostering inclusive and sustainable economic growth in sub-Saharan Africa.” He believed the investment will play a crucial role in empowering smallholder farmers, enhancing local food systems, and building resilience against climate change.
The investment comprised of up to $50 million from BII, $20 million from Swedfund, and $15 million from Norfund. With this latest funding round, AgDevCo projects significant scaling of its impact, aiming to reach four million farmers and support 60,000 jobs annually by 2030. Daniel Hulls, CEO of AgDevCo, acknowledged the “patient and strategic investment” required for developing commercial agriculture in Africa, welcoming the commitment from shareholders who “recognise the huge potential as well as the challenges of investing in the sector.”
BII latest commitment, combined with a previous $50 million investment in 2022, makes it the largest external investor in AgDevCo, with a total investment of $100 million. This significant backing signals the continued prioritization of African agricultural development by both the UK government and its Nordic counterparts through their respective development finance institutions.
