Biotech Updates

Investment Fund for African Seed Companies Launched

April 24, 2009

The Alliance of Green Revolution in Africa (AGRA) and the African Agriculture Capital (AAC), a venture capital investment fund that invests in several small African seed companies launched the African Seed Investment Fund (ASIF) last week. The first fund of its kind in the continent, ASIF will invest in at least 20 small- and medium-size seed companies in Southern and Eastern Africa over the next five years. The fund will operate in eight countries: Kenya, Tanzania, Uganda, Rwanda, Ethiopia, Mozambique, Malawi and Zambia.

According to a press release, the AGRA-AAC partnership aims to jumpstart a "well-capitalized, competitive and efficient regional" seed industry. Another goal of the partnership is to increase the participation of African seed companies in the global seed market, which is estimated at USD 30 billion. Up to USD 100 million will be provided to small-scale seed businesses to be paid back within two years. Medium-size companies, on the other hand, can avail of loans of up to a maximum of USD 1.5 million payable within three years.

"The sole purpose of ASIF is to provide high quality seeds to smallholder African farmers, thereby improving income and quality of life," explained Namanga Ngongi, AGRA's president. Ngongi added that "rather than having to choose between poor quality, low-yielding seed or high-cost hybrid seed marketed by multinationals, African farmers will have another choice."

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