The Agri-Business Capital Fund (ABC) has recently announced that it received its first investment from Bank of America in the form of a $5mn cheque, Business Leader reported on March 1.
The landmark investment in the growing fund allows the fund to help attract commercial investors. This comes as the ABC Fund is getting strong momentum with a track record of improving rural livelihoods, creating jobs and helping grow business.
So far, more than 20 investments have been made in nine countries – Benin, Bolivia Burkina Faso, Côte d’Ivoire, Ecuador, Ghana, Kenya, Mali, and Uganda.
The ABC Fund is a blended-finance impact fund investing in smallholder farmers and small-to-medium-sized rural agribusinesses in developing countries to support sustainable and inclusive agricultural value chains.
The goal of the fund is to help improve the livelihoods of smallholder famers in developing economies.
The blended finance structure supports an investment from Bank of America at the intermediate tranche (B-shares). All previous investors invested in the first loss tranche (A-shares) which acts as a buffer to stimulate commercial investments.
The capital structure of the fund is made of three tranches of different size, risk-return profile and maturity going from A to C-shares.
The Fund was initiated by the International Fund for Agricultural Development (IFAD) in partnership with, and is currently funded by investments from, the European Union, the Organization of African, Caribbean and Pacific States (OACPS), the Luxembourg Government and the Alliance for a Green Revolution in Africa (AGRA), and IFAD.
The IFAD investment was made possible thanks to financial support from the Swiss Agency for Development and Cooperation (SDC).
