FROM AECF: The first six grants have been awarded by the Africa Enterprise Challenge Fund (AECF), totalling about $6.5m and covering over five countries, including Uganda, Cameroon, Ghana, Sierra Leone and Malawi. The estimated number of rural households expected to benefit from this round directly total 1,240,000. It is expected that some grants will bring forward innovations that will help change the way markets function and have much wider, indirect benefits. Four of the projects fall within the Agribusiness Sector and two within Rural Financial Services.
The Early Bird Round in June brought an overwhelming response with over 400 firms showing an interest in applying for funding, following the launch of the AECF by Douglas Alexander at the World Economic Forum on Africa, June 2008. This round shows the massive appetite of private businesses to want to try out new ideas, in new places and help deliver markets and jobs, products and services that will change the lives of many millions of rural people in Africa.
The Investment Committee met in Nairobi to review the 16 business plans that had been selected for the final stage of the Early Bird Round and the six winners include:
Monitise plc: Monitise East Africa: MoniNet, Uganda then East Africa
Rural financial services in East Africa. Total: US$1,500,000 (1,000,000 grant. 500,000 loan.)
Guinness Cameroon: Sorghum Outgrower Scheme
Smallholder Sorghum development project in Northern Cameroon. Total: US$251,982 (grant)
Yara International SA: The Ghana Grain Partnership
Development of the Maize value chain in Ghana. Total: US$1,250,000 (1,000,000 grant. 250,000 loan.)
Biolands International Ltd: Smallholder Cocoa Improvement, Sierra Leone
Smallholder Cocoa improvement and export programme. Total : US$940,000 (200,000 loan. 740,000 grant.)
Illovo Sugar Company: Nchalo Business Linkages Project, Malawi
Development of a community owned sugar farm to provide sustainable development funds for the community. Total: US$1,500,000 (grant)
Swiss Re: Weather Index Insurance, Sub-Saharan Africa
Pilot programme to test and implement weather index insurance programmes for smallholder farmers in SSA with a variety of market players. Total: US$1,000,000 (grant)
DFID has pioneered the use of challenge funds as a means to booting economic growth. The Africa Enterprise Challenge Fund, a Commission for Africa recommendation, was launched at the World Economic Forum in June. The initial size of the fund is US$50m and the investment size will range from US$250k to $1.5m. The fund is backed by The African Development Bank (ADB), the Consultative Group to Assist the Poor (CGAP), the UK Department for International Development (DFID), the International Fund for Agricultural Development (IFAD), and the Netherlands Ministry of Foreign Affairs (NMFA) and is being hosted by the Alliance for a Green Revolution in Africa (AGRA). The early indications of high demand are expected to attract other donors.
The aim is to encourage private sector companies to compete for like-for-like investment support for their new and innovative business ideas in the fields of agri-business and rural financial services.
A second investment committee meeting will be held in December to evaluate proposals and select the winners for the next round.
The Commission for Africa's recommendation is now out there, doing business.