Uganda sows $27m agriculture fund

The EU, the International Fund for Agricultural Development and the National Social Security Fund have joined forces to launch the Yield Uganda Investment Fund.

Agriculture-focused small and medium-sized enterprises in Uganda are set to benefit from the €25m ($27m) Yield Uganda Investment Fund, backed by the European Union, the International Fund for Agricultural Development (IFAD) and the National Social Security Fund (NSSF).

IAFD is a specialised agency of the United Nations, created in 1977 to respond to the food crises in the Sahelian countries of Africa. NSSF is a quasi-government agency in Uganda responsible for the retirement funds of private sector employees.

The three investors have made an initial commitment of €12m to the impact fund, which is being arranged by Deloitte Uganda and Pearl Capital Partners Uganda. Pearl Capital will manage the fund.

The fund will provide equity, semi-equity and debt to approximately 20 SMEs in the agricultural sector, including areas such as post-harvest storage and distribution, production, processing as well as transportation, communications and certification.

IFAD, through grants provided by the EU, will also offer business development support, including guidance on company accounting, governance, budgeting, tax compliance and auditing, innovation and tech transfer, marketing studies and the adoption of international product quality and safety standards.

Kristian Schmidt, EU ambassador to Uganda, said: “The launch today marks an important milestone. In creating this investment fund, the EU has listened and is responding to the needs of Ugandan agribusiness.

“This is a first of its kind to be funded by the EU where we are blending private equity and grants and we are proud that Uganda is a beneficiary. Yield Uganda Investment Fund is the result of continued efforts and commitment from the European Union to support the agribusiness sector by lowering the cost and risk of investments.

“This fund will offer presently lacking long-term capital to entrepreneurs in the agricultural sector and contribute to the modernisation and expansion of agribusinesses companies while providing quality financial returns for investors.”

The fund is expected to hold its second close at its €25m target later in 2017.

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