Credit: EU

On 15 February 2019, Luxembourg launched a new instrument for sustainable finance: the Agricultural Entrepreneurship Investment Fund (ABC Fund).

On the sidelines of the 42nd Board of Governors of the International Fund for Agricultural Development (IFAD) held in Rome from 14-15 February 2019, Luxembourg, represented by the Minister of Cooperation and Action President Paulette Lenert, the IFAD, represented by its President Gilbert Houngbo, the European Commission, represented by European Commissioner Neven Mimica, and the Alliance for a Green Revolution in Africa (AGRA) launched the new ABC Fund.

The purpose of the fund is to stimulate economic and social development in rural areas through investment in rural and agricultural micro, small and medium enterprises (MSMEs). Indeed, the ABC Fund responds to several crucial challenges in developing countries, particularly Africa: the gap between population growth and growth in agricultural production, the lack of employment prospects for young people and the lack of access to employment opportunities to the credit of rural and agricultural MSMEs, which are too large to benefit from microcredit and too small to offer sufficient guarantees to the "classic" banking system. Achieving the ambitious goals set by the 2030 Agenda and the Sustainable Development Goals (SDGs) in the rural and agricultural sectors thus require a different approach to financing food through a public-private partnership.

In close collaboration with IFAD, the Luxembourg Cooperation initiated the idea of ​​this instrument and was also the first contributor to the fund. Based in Luxembourg, the ABC Fund will be managed by a fund manager similarly based in the Grand Duchy, Bamboo Capital Partners.

On this occasion, the European Commission committed €40 million, AGRA €4.5 million and Luxembourg €5 million in the initial part of the fund. In the next 10 years, the fund should have a total of €200 million in invested capital, particularly from the private sector, and thus reach more than 700,000 households in developing countries.

As part of her trip to Rome, Minister Lenert also met David Beasley, Executive Director of the World Food Programme (WFP), José Graziano da Silva, Director General of the UN Food and Agriculture Organisation ( FAO), as well as Neven Mimica, European Commissioner for International Cooperation and Development.