The Africa Agriculture and Trade Investment Fund (AATIF) is a blended finance vehicle that invests in agricultural production and businesses along the agricultural supply chain in sub-Saharan Africa. Through its investments, AATIF aims to increase food security, strengthen income among people employed in the agricultural sector, and strengthen the competitiveness of local agriculture businesses.30
The fund, managed by DWS, provides direct financing to commercial farms, processing companies and cooperatives, and indirect investments to local financial institutions and large agricultural intermediaries on-lending to small and medium companies. The fund provides financing in the form of debt, mezzanine or equity to companies or financial institutions. A $6 million technical assistance facility, provides technical support to beneficiaries, including for due diligence impact assessment and accounting. Founding partners include BMZ,31 who provides a first loss guarantee; KfW, who together with the Deutsche Bank capitalizes the fund’s mezzanine transactions; DWS as an equity investor; and the European Commission who invests in the fund’s junior equity tranche. Its compliance advisors are ILO32 and UNEP.33
Since its inception in 2011, the fund has disbursed $300 million to 19 investees and indirectly supported over 250 agri-businesses in 16 countries.34 The portfolio includes financial institutions like a $25 million, 5-year loan to BancABC to support the growth of its agriculture funding; to intermediaries like a $20 million, 3-year loan to Wienco – a Ghanaian distributor of inputs and off-taker of cocoa, maize and cotton; or direct investment in the form of an $11 million, 5-year (plus an extension for up to 10-year) loan to Agrivision Africa for its seed farm and vertical integration into wheat and maize processing.35
30 ‘Home’. n.d. AATIF – Africa Agriculture and Trade Investment Fund. https://www.aatif.lu/home.html.
31 Federal Ministry of Economic Cooperation and Development (Germany)
32 International Labour Organization
33 United Nations Environmental Programme
34 ‘Increasing Income. Improving Food Security: AATIF Annual Report 2019/20’. n.d. Annual Report. Bourmicht: AATIF – Africa Agriculture and Trade Investment Fund. Accessed 2 November 2020. https://www.aatif.lu/annual-reports.html.
35 ‘Investment Portfolio’. n.d. AATIF – Africa Agriculture and Trade Investment Fund. Accessed 2 November 2020. https://www.aatif.lu/investment-portfolio.html.