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Sahel Capital, manager of the Fund for Agricultural Finance in Nigeria (FAFIN), has announced the successful closure of a $66 million debut funding process which includes the African Development Bank, CDC Group, and the Dutch Good Growth Fund, jointly committing $31 million to FAFIN and joining other existing co-sponsors of the fund to drive Nigeria’s agricultural growth.
Sahel Capital intends to invest the funds over the next two years in sustainable businesses that seek to revolutionise the Nigerian agribusiness landscape through the creation of jobs, increasing productivity and strengthening priority value chains in the sector.
Speaking on the final close of FAFIN, Mezuo Nwuneli, managing partner, Sahel Capital said, “we are especially grateful to the immense commitment and support we have received from our existing investors, and especially the Federal Ministry of Finance, the Federal Ministry of Agriculture and Rural Development, and the Nigeria Sovereign Investment Authority, in making FAFIN a reality.
“The successful final close of FAFIN is a testament to the confidence our investors have in the scaling up and sustainability of the fund that was conceived in 2013. We also look forward to partnering with our incoming investors to driving catalytic growth in the sector through our partnerships with strong agribusinesses,” Nwuneli said.
With the additional capital raised, Sahel Capital aims to invest in 9 to10 additional companies which would create over 4,000 more direct and indirect jobs, and further uplift the lives of over 36,000 smallholder farmer families across Nigeria.
As part of this fundraising round, KfW Development Bank has also offered to increase its commitments to FAFIN by an additional $10 million, subject to final approvals, which if provided, would increase the fund size to $76 million by December 2017, noted Sahel Capital, in a statement provided to BusinessDay.
Kemi Adeosun, Minister of Finance, remarked on the fundraising’s outcome, saying “We are focused on acting as a catalyst for private sector capital to drive growth in the agribusiness sector. With this close, we would have succeeded in partnering with various investors to secure $76 million for agribusinesses in Nigeria.”
Audu Ogbeh, minister of Agriculture and Rural Development, said in a statement that “The Ministry is fully committed towards the development of the agricultural sector, and although key developments in the sector would continually be private sector driven, the Federal Government would provide the necessary incentives to grow the sector by facilitating financing and support for Small to Medium Scale Enterprises through investment vehicles such as FAFIN.”
Since FAFIN’s launch in 2014, Sahel Capital has assessed over 100 companies and elected to invest in four indigenous high growth companies. Through these investments in the dairy, edible oils, poultry and cassava value chains of Nigeria, FAFIN has created over 500 new jobs 50 percent of which are occupied by women and youth and improved the lives of over 1,000 small holder farmers and their families by supporting innovative business incentives and out-grower schemes.
Uche Orji, MD/CEO, NSIA which also has investments in FAFIN said, “Through FAFIN, NSIA will continue to tap into key commercial and sustainable growth opportunities in agriculture. Our strategic interest in the sector is predicated on our commitment to drive rural and urban infrastructure development, and we believe FAFIN is well positioned to capture these opportunities.”
FAFIN is a private equity fund that provides financial, capacitybuilding, and technical assistance to selected SMEs in the Nigerian agribusiness sector.
Investors in FAFIN include the African Development Bank, DFID Impact Fund (managed by CDC Group), Dutch Good Growth Fund (managed by Triple Jump), the Federal Government of Nigeria, KfW Development Bank, and the Nigeria Sovereign Investment Authority. FAFIN is managed by Sahel Capital, an agribusiness focused private equity firm established in 2010.
Josephine Okojie & Caleb Ojewale
