Africa | October 23, 2018

USAID backs Food Securities Fund with $37.5 million guarantee

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, October 22 – Luxembourg-based Food Securities Fund is a blended finance initiative from investment advisory firm Clarmondial. The fund offers affordable lines of credit to agricultural producers in emerging markets in order to cultivate sustainable agricultural practices. A USAID guarantee is meant to de-risk the fund’s target $150 million portfolio.

The Food Securities Fund was launched in 2016 to link investors interested in sustainable agriculture to “stakeholders working with smallholder farmers to promote rural economic development, food security and climate smart agriculture.” It is structured as an open-ended, fixed-income fund, while providing agricultural producers season-long loans.

Small agri-businesses in emerging markets often have access to limited, high-cost and inflexible kinds of capital, like pre-planting credit to purchase inputs for the season.

Clarmondial has not yet announced any investor commitments or how much capital has been raised, beyond USAID’s guarantee. Blended finance platform Convergence and European climate innovation initiative Climate-KIC have supported the fund’s development.