February 4, 2021
By investing across the African food value chain, a new fund aims to create 2000 new jobs and increase food supply.
A group of development finance institutions (DFIs) – CDC Group, Norfund, Finnfund, FinDev Canada and BIO – announce an $82 million joint commitment to Phatisa Food Fund 2, managed by Phatisa. PFF 2 will invest across the African food value chain, considering investments in mechanisation, inputs, poultry and meat production, food processing and manufacturing, logistics, aggregation and distribution across Sub-Saharan Africa.
Norfund has committed $20m to the investment that aims to strengthen and increase food supply, local production and distribution across the region.
The Fund has reached a final close of $143m, bringing DFIs and commercial investors together to boost the supply of quality food in Sub-Saharan Africa – where an estimated 239 million people are affected by food insecurity.
Norfund is happy to be part of this opportunity to invest in businesses that are expected to create a large number of jobs and increased business opportunities within the food production space across Sub-Saharan Africa.Olav Akrawi, Project Manager in Scalable Enterprises Norfund
The Fund, via its investment in companies in the food value chain, targets over 90,000 small-holder farmers and micro-entrepreneurs and aims to create over 2,000 permanent jobs and sustain another 10,000 jobs. The investment follows the success of Phatisa’s African Agriculture Fund (AAF), which has created more than 1,800 jobs and benefitted 86,000 farmers operating in over 20 markets across the continent.
Building on AAF, Phatisa Food Fund 2 will enable small-holder farmers and micro-entrepreneurs to develop their skills, broadening access to markets and economic opportunities. The new fund will also address access to, and affordability of products among farmers and promote smart agricultural methods – enhancing crop resilience, reducing food loss and waste by 50% in the companies it finances, while increasing outputs, yields and incomes.
Norfund has already co-invested with the fund in a Malawian provider of agricultural equipment and services, Farming and Engineering Services Limited (FES).
– The Fund’s plans are aligned with Norfund’s strategy, directing its focus towards companies with strong financial prospects that will contribute to economic growth and improve the value chain in the food and agri-sector, says Olav Akrawi, project manager in Norfund.