UGANDA – The Yield Uganda Investment Fund, an European Union (EU) backed agribusiness impact fund has injected US$9.19 million (UGX34bn) into Uganda’s agribusiness sector.
The new financing follows the joining of Soros Economic Development Fund, part of Open Society Foundation (OSF) and FCA Investment (FCAI) into the investment fund.
The Fund was established in January 2017 by the EU, through the International Fund for Agricultural Development (IFAD) and the National Social Security Fund (NSSF) with an initial US$13.48million investment.
Over the last 30 months since its inception, it has substantiall grown hitting the US$22.46 million (UGX 85bn) mark in total commitments, following an US$8.99 million investment from the Open Society Foundations and FCA Investments.
The EU ambassador to Uganda, H.E Attilio Pacifici, said that the new capital injection “will allow Uganda agribusiness companies to access the needed long-term capital for industrialization.
“Mobilizing investment for the agro industrialization of Uganda had been the main reason for the creation of Yield Uganda Investment Fund by the EU.
“As outlined in the European external investment plan, the EU is aiming at attracting capital into Uganda to foster development in agriculture, trade and industrialization.”
The Yield Uganda Investment Fund works through a public-private partnership model allowing investors to offer innovative and tailored financial solutions, using equity, semi-equity and debt, to small and medium-sized enterprises (SMEs).
The fund targets agriculture-related business across all value chains including the supply of agricultural inputs, production and agro-processing within all sub-sectors as well as peripheral activities such as supportive infrastructure.
To date, Yield has made an investment of over US$2.16m (UGX8bn) in SESACO limited, soya products agro-processing company and CECOFA, a coffee processor.
It has also invested in Chemiphar, an analytical laboratory providing testing and inspection services to SME businesses.
Typical areas of the funds support include company governance, accounting, budgeting, auditing and tax compliance, innovation and technology transfer, marketing studies, and the adoption of international product quality and safety standards.
“IFAD is reassured by the confidence and delighted to welcome open society foundations and FCA investment to the Yield Uganda fund as part of the 2nd close investors,” noted IFAD Country Director for Uganda, Laskhmi Moola.
“Their additional financing, to yield, and their expertise in the impact sector will add value to the existing partnerships.
“Together with OSF and FCAI, we will amplify the impact of the Yield Uganda fund by continuing to improve the fiscal environment for the Uganda agri-SMEs and improve the lives of the smallholder farmers they work with,”
“Agriculture plays a vital role in economic growth and sustainable development. Investment in the sector is an effective instrument to alleviate poverty and enhance food security,” she added.
The fund targets to improve over 100,000 rural households livelihoods through improving access to markets for their produce, higher quality agricultural inputs and services; creating jobs and ensure food security.