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Acumen raises $58m to build African farmers’ climate resilience

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Acumen raises $58m to build African farmers’ climate resilience

Acumen Resilient Agriculture Fund (ARAF) has announced that it has secured $58 million to help fund the adaptation to climate change of smallholder farmers.

Launched by Acumen, a non-profit impact investment fund, and anchored by Green Climate Fund (GCF), ARAF is funded by the Netherlands Development Finance Corporation (FMO), Soros Economic Development Fund (SEDF), Children’s Investment Fund Foundation (Ciff), Ikea Foundation, Global Social Impact, and Proparco, the subsidiary of the French Development Agency (AFD) group.

Food insecurity is a huge challenge in Africa. Even as the continent relies on farmers to provide approximately 80% food, climate-related factors like soil degradation, severe storms, shifting weather patterns, and more have changed the dynamics of farming, threatening farmers’ livelihoods and consumers with starvation.

In a bid to help smallholder farmers adapt to climate change, ARAF was launched, becoming the first climate adaptation-focused agriculture investment fund for affected small-scale farmers, many of whom are in Africa.

Booming investment interest in climate adaptation & resilience 

Having started deploying capital 2020, the fund has invested in five companies operating in Kenya, Uganda, and Nigeria.

Commenting on the new investment, the General Manager of ARAF, Tamer El -Raghy, said, “ARAF’s impressive $58 million close, $8 million above our initial target for the fund, is a watershed moment and, with only 5% of climate investment directed toward adaptation, signals the beginning of a shift in climate finance.

By investing in agri-startups in East and West Africa, ARAF can reduce poverty, build climate resilience, and demonstrate the impact of investing in resilient agriculture.”

The fund’s successful raise of $58 million above its target underscores a new interest in climate resilience among large investors.

“As a very reputable investor with an impressive track record in impact investing, Acumen’s focus on investing in promising early-stage companies active in smallholder value chains across East and West Africa aligns perfectly with FMO’s strategy.

More importantly, by also being the first climate adaptation-focused agribusiness fund for African smallholders, the fund meets both our Green and Reducing Inequalities labels,” said Pieternel Boogaard, director of agribusiness, food, and water at FMO.

Through this collaboration, ARAF and its donors will help to reduce poverty, increase climate resilience and galvanize the growth of the sector that can help build a more sustainable and prosperous future.

The fund also uses blended finance to provide long-term support to small and medium-sized agribusiness enterprises (SMEs) and through its $5 million Technical Assistance Facility (TAF) which is designed to provide farmers practical support they need.

The TAF is funded by grants from the GCF, the Ikea Foundation, the UK Foreign, Commonwealth, and Development Office (FCDO), and the FMO.

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