At the beginning of July, our Apexagri team attended an event organised by FERDI (Fondation pour les Études et Recherches sur le Développement International) and ALFA – Agriculture, Livestock, Fisheries, Africa (of which Apexagri is a member) at InVivo’s head office in Paris.
The theme of the event was “Financial innovation for agricultural entrepreneurship in the UEMOA (West African Economic and Monetary Union)” and was introduced by Amadou MBODJ, Director of Agriculture at the UEMOA Commission.
This was an opportunity to discover the presentation of the new financing vehicle studied by FERDI.
A new financing vehicle proposed by the FERDI
This new financing vehicle was presented by Alexis BEFENO, Independent Financial Advisor in Impact Investment and Blended Finance, who worked on the subject for FERDI.
Context: agriculture in West Africa (and throughout Africa) suffers from a cruel lack of financing, due in particular to excessively high entry fees for investment funds, a high level of financial risk and a return on agricultural projects that is too slow for private investors.
Objective: to propose a hybrid way of encouraging financing by bringing together the interests of the private sector (reducing financial risks and accelerating the profitability of investments) and the public sector (positive social and environmental impacts) in an integrated approach to agricultural value chains.
Solution: create a new public/private finance vehicle (“blended finance”) with mixed governance and a long-term perspective, reducing the financial risks for the private sector (which would have priority over repayments) and guaranteeing the positive impact required by the public sector (with clear, measurable objectives).
Blended Finance Africa: an innovate financing model with encouraging potential
An innovative model with encouraging potential, which could eventually support nearly 100 “champion” businesses of all sizes, to help structure and develop agricultural value chains in West Africa.
Well done to all the players, institutions, entrepreneurs and researchers involved in this “blended finance africa” project!