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EU investment fund gets €8 million to boost agribusiness in Uganda

23/07/2019 - 15:39
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The Yield Uganda Investment Fund, set up by the European Union receives €8 million (approximately sh34b) to support agribusiness in Uganda.

New financing to the tune of 34 billion Uganda shillings is made available to support agribusiness in Uganda as new funding partners; Open Society Foundations (OSF) and FCA Investments (FCAI) join the Yield Uganda Investment Fund. The agribusiness impact fund, set up in January 2017 by the European Union (EU), through the International Fund for Agricultural Development (IFAD) and the National Social Security Fund (NSSF), with an initial €12 million investment, has now hit the €20 million (UGX 85 billion) mark in total commitments, following an €8 million investment from the Open Society Foundation and FCA Investments.

The Yield Uganda Investment Fund is a partnership between public and private investors that offers innovative and tailored financial solutions, using equity, semi-equity and debt, to small and Mediumsized Enterprises (SMEs) having the potential to generate both strong financial returns and significant social impact. Deloitte Uganda and Pearl Capital Partners Uganda (PCP) established the Fund, currently managed by PCP Uganda, with the mandate to make investments in the range of €250,000 to €2 million (approx. UGX 1 billion to UGX 8.5 billion).

To date, Yield has made investments of over UGX 8 billion in SESACO limited, an agro-processing company specialising in soya products, CECOFA, a coffee processor, and Chemiphar, an analytical laboratory providing testing and inspection services to SME businesses.

"Mobilizing investments for the agro industrialization of Uganda has been the main reason for the creation of Yield Uganda Investment Fund by the EU. In 2017 NSSF joined the EU to launch the first Investment Fund and today FCA Investments and Open Society Foundation add substantial capital which will allow Ugandan agribusiness companies to access the needed long-term capital for industrialization. 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,” said EU Ambassador to Uganda, H.E Attilio Pacifici

The Fund targets agriculture-related businesses across all value chains including supply of agricultural inputs, production and agro-processing within all sub-sectors, post-harvest storage and distribution, but also peripheral activities such as transportation, communications and certification. The Fund seeks to support businesses with a clear competitive advantage and ambitious local management.

The Fund targets to improve over 100,000 rural households livelihoods through improving access to; 1) markets for their produce, 2) higher quality agricultural inputs and services; creating jobs and employment opportunities, ensuring food security while generating income, foreign exchange and new export opportunities, all fundamentally contributing to Uganda’s economic growth and goal to eradicate poverty.

High-quality business development support (BDS) are critically important when modernizing and expanding Yield Fund’s investee companies to make them more effective, growth-oriented and profitable. An integral and complementary part of the Fund’s investment process is to support the operations of its investee companies through matching grants for BDS. Typical areas of the Fund’s BDS 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. This extra service to Yield Fund’s investee companies is funded with grants from the EU managed by IFAD.  

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