1. THE AFRICAN AGRICULTURE FUND

2. AFRICAN AGRICULTURE FUND The opportunity of an investment fund Investment strategy and targets Fund governance Fund structure Technical Assistance Facility

3. The opportunity of an Investment Fund (1) The rise in global food demand will require doubling food production by 2050 Commodity forecast real prices 200720082009201020152020 Maize $/mt139175126127 125 Wheat $/mt216256194196197 Rice $/mt277513339343 344 Soybean meal $/mt260334241235225217 Soybean oil $/mt747971685639643570 Sugar c/kg192321222527 (source World Bank, Prospects for the Global Economy, April 2009) Data for 2007 & 2008 are actual prices and data for 2009 - 2020 are price forecasts Private initiatives to increase agricultural production will be boosted by continued high market prices ( risk of volatility) in the medium- term and by more supportive and effective public policies

4. The opportunity of an Investment Fund (2) Growing opportunities in domestic and regional food markets / Investments giving priority to a regional market approach will reduce the vulnerability of African production The implementation of this type of investment requires FOs, producers organizations and enterprises financially sound with sufficient management skills and capacities, capital to mobilize financing resources New and coordinated mobilization of the international community (FAO Summit, Doha Conference, EU Food Facility, G 8 L Aquila) within the framework of a Global Partnership for Food Security and Agriculture

5. The « missing middle » in African agro-enterprises Source : Market Matters, New York,April 2009 for UNIDO and FAO

6. The opportunity of an investment fund (3) AGRA, AfDB, AGRA, BOAD, IFAD and AFD have consequently decided to promote the African Agriculture Fund to boost Africa’s agriculture and agro-industry (Letter of Intent ) South Africa-based Phatisa L.L.C. selected as Fund Manager. The Fund has an initial target size of US$150M to become operational (November 2009) and expects to raise additional commitments up to an aggregate capital amount of US$ 500M

7. Investment strategy and targets (1) Targets / Business Partners Operate in food production industries or provide financial services to small agri-business operators and SMEs, cooperatives or farmers organisations Have a clear business plan focusing on developing and/or diversifying their products/services and/or sectoral integration Ability to grow their markets within the region levels or to develop export opportunities Ability to maintain satisfactory payment terms to suppliers especially smallholder farmers Implement measures to protect and continuously mitigate their impact on the environment ( social and environmental standards) Ability to invest in the value chain to reduce transaction costs of the producers/processors / storages/marketing interfaces

8. Investment strategy and targets (2) Main Investment sectors Cereals production (rice, maize & wheat) Roots and tubers (Cassava …) Livestock and diary products Fruit products Seeds production and fertilizers Fats and oils Rural domestic credit and insurance institutions

9. Investment financing Investment strategy and targets (3) Equity and quasi equity products Technical Assistance Facility (TAF) Two windows of financing enterprises: –A small-medium size company financing window offering investment between US$ 0.15 M and US $4M –A large company financing window for investment up to US$15M The fund will invest a minimum of 20% of the Final Closing in SMEs and micro-finance sectors

10. Investment strategy and targets (4) Investment strategy Investment in a company’s own funds will not exceed 20% The Fund will invest no more than 30% and no less than 20% of its total commitment in any single region (Southern, Eastern, West and Central, North and Eastern Mediterranean) Investment in a sector will not exceed 25 % of its total commitments and will not participate in any hostile transaction.

11. Investment strategy and targets (5) Fund term and exit strategy Five year commitment period Seven/ten year investment maturity Exit strategy shall be, as the case may be, to provide for the option for local agricultural producers to acquire interests in the targets Average IRR per target shall be around the mid-teens

12. Fund structure Sponsors Funding Commercial Investors Funding AFRICAN AGRICULTURE FUND Category A/B Category C ADVISORY BOARD INVESTMENT COMMITTEE SME Committee T A F (Grants) Investments Small-size Company Window USD 150,000 – 4,000,000 Investments Medium/Large-size Company Window USD 15,000,000 on average Fund Manager Management Agreement Technical Assistance Facility - TAF Institutional Investors Funding

13. Fund Governance Fund Manager. Responsible for the overall financial and administrative management for the fund Deal sourcing. All diligences required further to targets investments; Representation of the Fund with respect to target’s board of directors or equivalent board or committee; Definition of exit strategy Advisory Board Composed of independent members and representatives of investors The Fund manager is entitled to participate in the deliberations, but will not be a voting member Guidance on the implementation of the Fund’s investment strategy Ensuring adherence of the Fund to its investment charter. Resolving conflict of interests Investment Committee. Comprising representatives of the Fund. promoters or investors. All investment decisions of the Fund, on the basis of reports of evaluations and due diligence performed by the manager Post-investment monitoring, Reviewing progress of the Fund’s portfolio and Fund manager performance

14. Main Objectives of the TAF To strengthen the management and the technical capacities of small scale farmers and SMEs to access to the resources of the AAF and of the business development financing To further develop the capacities of the agricultural financial sector ( to provide efficient services to SMEs)

15. Type of technical assistance Development of outgrowers and/or contract farming schemes Business plans for expansion of SMEs Capacity-building for managers in areas such as basic business principles, financial and risk management, human resource management, information systems and marketing, entrepreneurial coaching Agronomical training and contract work for affiliated smallholders farmers/producers associations Market research and surveys and market linkages between SMEs and various actors of value chains, including technology and knowledge transfer Assistance with quality certifications, Training for microfinance organizations staff and microfinance product development and research to agrobusinesses and SMEs

16. Thank you for your attention