Agrica

Africa

Region

67.8

Investment (MNOK)

Exit

Status

Agrica is a 5000ha rice and maize farm and mill on Mngeta Farm in the Kilombero Valley in Tanzania. The Company produces rice and maize for the local market and has in addition initiated a ‘System of Rice Intensification program’ (SRI) to facilitate mentoring of small scale farmers to increase the quality and quantity of their yields. Norfund invested in Agrica in September 2010; the investment represents for Norfund a continuous focus on the development of sustainable agribusiness in Eastern Africa.

detail_image

Key information

Sector:
Scalable enterprises
Investment (MNOK):
67.8
Year:
2010
Region:
Africa
Country:
Tanzania, United Republic Of
Domicile:
Guam
Instrument:
Equity
Status:
Exit
Mandate:
Development

Agrica was a 5,000 hectare rice and maize farm in the Kilombero Valley in Tanzania. The objective of the project was to produce more than 20,000 tons of rice per year and 30 000 tons of maize and contribute to a significant increase in security of food supply for Tanzania.

Norfund’s investment in Agrica

Norfund invested in the company in September 2010, and the investment represented for Norfund a continuous focus on the development of sustainable agribusiness in the least developed countries in Eastern Africa. Norfund’s investment was deployed in the expansion of the farm, including preparation and planting of 2,000 hectares , increase in processing and storage capacity, machines and equipment and renovation of a small-scale hydropower plant that supplied the production with clean electricity.

Unfortunately, the company did not succeed in producing as large volumes as was planned and was struggling economically. The reasons were many, among others extreme weather conditions such as several floods, droughts and swarm invasions. Today, the company is under receivership.

Norfund exited the investment in 2019. This was among the investments with the highest risk that Norfund has ever taken. We knew that the risks were high, but we believed that we could mitigate them. The lessons learned from this project and the challenges in similar projects has led us to adjust our agribusiness strategy.