The first impact fund to acclimatise smallholder farmers closes at $58m
A $58m impact fund, sponsored by the Acumen Resilient Agriculture Fund (ARAF) and supported by a number of other investors, was announced last week (27 July). Climate change has affected many smallholder farms in Africa, and the fund – which claims to be the first of its kind – will assist agribusinesses with helping these farmers acclimatise.
The agribusinesses being funded provide aggregation, digital platforms and financial solutions to smallholder farmers.
“Much of our work focuses on helping low-income people, particularly farmers, adapt to and become resilient to climate change,” said Jacqueline Novogratz, Acumen founder and CEO. “That’s why we are so proud to sponsor ARAF and lead a group of committed investors to inject much needed capital into early-stage, integrated agribusinesses that will promote economic growth.”
The goal is to “enhance the climate resilience”, according to Tony Clamp, director of the Green Climate Fund’s Private Sector Facility. Clamp claimed the fund was the “first climate adaptation-focused agribusiness investment fund in Africa”.
ARAF’s impressive $58m close, $8m above our initial target for the fund, is a watershed moment
By supporting African agribusinesses, the fund plans to address multiple climate change issues, including soil degradation, severe storms and shifting weather patterns.
In a news release, it said smallholder farmers were Africa’s main source of food. While these farms have been hit hard by the climate crisis, they are relied upon to produce 80% of the continent’s nourishment.
The other investors involved in this fund are the Dutch entrepreneurial development bank FMO, the Soros Economic Development Fund, the French development institution PROPARCO, the Children’s Investment Fund Foundation, IKEA Foundation, Global Social Impact, and additional sources.
Tamer El-Raghy, the fund’s managing director, said: “ARAF’s impressive $58m close, $8m above our initial target for the fund, is a watershed moment and, with only 5% of climate investment directed toward adaptation, signals the beginning of a shift in climate finance.”
Photo credit: Peter Irungu
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