Injaro Investments Limited plans to invest close to $50 Million in West Africa’s agribusinesses
Injaro Investments Limited (“IIL”) is pleased to announce the final closing of Injaro Agricultural Capital Holdings Limited (“Injaro”), its West-Africa focused impact-oriented fund, with total commitments of US$49m. Final closing commitments of US$15m, US$10m and US$7m were received from European development finance institutions (DFIs) comprising CDC, via its DFID Impact fund; from FMO, via its MASSIF Fund; and from PROPARCO, via its Investment and Support fund for Business in Africa (FISEA) respectively.
Representing 30% of the West African GDP, 65% of the jobs, 70% of internal trade and 68% of the industrial transformation, agriculture is a key sector for the development of the region. Nevertheless the sector suffers from a lack of financing (especially equity financing), low yields, an insufficient access to land and a weak business regulatory framework. Injaro is one of a very small number of private equity funds focusing on the sector. This investment in Injaro represents a much needed commitment to West Africa’s agricultural sector and especially for small agribusinesses operating in the region which generally tend to be avoided by traditional investors.
Injaro’s mission is to make sustainable investments in SMEs operating along the agricultural value chain in West Africa in order to alleviate poverty and improve food security. The target populations for impact are rural smallholder farmers and low income producers and consumers. Injaro’s investment footprint is focused on Ghana, Côte d’Ivoire, Mali, Burkina Faso, Niger and Sierra Leone. The new commitments of the DFIs validates the earlier support for the management team by Injaro’s first closing investors which include the Lundin Foundation, the Alliance for a Green Revolution in Africa (AGRA); the Soros Economic Development Fund (SEDF); and three family offices.
Jerry Parkes, CEO of IIL, remarked “The Injaro team is proud to have secured investments simultaneously from three reputable DFIs with a long track record of investments in Africa. These new investments from CDC, FMO and FISEA/Proparco give our fund scale and legitimacy in the impact investment space, helping to build a track record that will attract further private investment into this emerging asset class. With an increased fund size of US$49m we hope to positively impact over 1 million smallholder farmers and low income persons in West Africa.”
Thomas Jetter, Managing Director of SEDF commented: “We congratulate the Injaro team on this very successful fundraising. After our early support, this additional funding reinforces the critical mission to support West African agribusinesses, and the added value contributed by the Injaro team to the local entrepreneurs, small producers, and its economies.”
Stephen Nairne, Managing Director of the Lundin Foundation added “We are extremely pleased that Injaro has achieved its target capitalization. With its dual focus on providing risk capital and technical assistance to SMEs along the agricultural value chain, the fund fills a critical gap in West Africa’s financing landscape.”
Leveraging its local presence in Ghana and Côte d’Ivoire as well as technical assistance facilities, Injaro is able to provide strong support to its portfolio companies. The fund’s investments have enabled SMEs to expand their activity, generating more than 600 jobs, around US$7m in gross earned revenues and serving around 10 000 clients. Thanks to its partnership with AGRA, Injaro has been an active investor in the seed production sector, providing this essential input to help improve the productivity of West African farmers. This specific partnership expects to significantly increase smallholder farmers’ yields for essential staples like maize thus improving their food security and increasing their income. “The investments made by Injaro in several SME seed companies in the Sahelian countries have allowed these companies to demonstrate the power of the private sector to provide new and useful technologies to smallholder farmers at scale and to become leading regional suppliers of high-yielding seeds” reiterated Dr. Joe DeVries, Director of AGRA’s Program for Africa’s Seed Systems (PASS).
As at 30 June 2014, Injaro had already made commitments of a total amount of US$9.3m to seven companies located in five different countries. These include a poultry inputs supplier (Proveto SA, Côte d’Ivoire), a cashew processing company (Kona Agro Processing, Ghana), a shea butter processor which produces personal care products (SeKaf, Ghana) and four seed production companies (ES Alheri, Faso Kaba, Nafaso SA and M&B Seeds located in Niger, Mali, Burkina Faso and Ghana respectively). Source: AVCA