Boosting agrifood investments through Development Finance Institutions at the African Agri Investment Indaba Conference

The FAO Investment Centre co-organized and moderated the Development Finance Institutions Forum (DFI Forum) with the African Agri Council in Cape Town on 20 November. 

Held as a side-event of the African Agri Investment Indaba, the Forum gathered representatives from 12 bilateral and multilateral DFIs financing private agrifood investments.  

This closed-door meeting allowed DFIs to compare their strategic priorities for the agrifood sector and share key insights and lessons learnt from specific agrifood transactions in an open and pragmatic way. Many of the participants were already existing FAO Investment Centre partners, like the European Bank for Reconstruction and Development, the International Fund for Agricultural Development, the African Development Bank, the European Investment Bank and Cassa Depositi e Prestiti and share common objectives. 

DFIs called for more collaboration to overcome common challenges related to business development, transaction costs and FX risks. They stressed that African agrifood companies often need both debt and equity, so DFIs should have the adaptability to provide a mix of different financial instruments. The centrality of working capital financing was also highlighted. Two DFIs presented blended finance initiatives designed to de-risk investments through technical assistance provided to agrifood companies and banks financing the agrifood sector. 

Overall, the Forum was an opportunity to challenge some misconceptions about agrifood financing. "We believe that development impact and financial return should not contradict each other”, stated the representative of a DFI based in Nairobi, Kenya.  

The FAO Investment Centre emphasized the crucial role of DFIs to contribute to food security as well as to the transition towards more sustainable agrifood systems. “USD 10 billion is the global amount of the consolidated agrifood portfolio of the 12 DFIs who attended the Forum. This is sizable but more is needed to respond to the demand of agrifood companies globally and in Sub-Saharan Africa’’ said Nuno Santos, Deputy Director of the FAO Investment Centre. 

Beyond the DFI Forum, the FAO Investment Centre team also participated in several panels. Nuno Santos moderated a roundtable about new export markets. Alexandre Kaufmann (Agribusiness Finance Officer) presented key takeaways from an upcoming FAO study about the track record of investment funds financing the agrifood sector in emerging and frontier markets.  

In another panel, Anass Khallouqi (Investment Specialist) highlighted the role of local financial institutions in addressing food insecurity.  

Overall, the African Agri Investment Indaba event provided a platform to connect with key stakeholders and discuss main investment trends in the public and private sector, to which FAO can contribute with technical knowledge and expertise.