The Moringa SICAR, an agroforestry sector investment vehicle, is aiming to achieve a final close in February 2015, according to Clément Chenost, Technical Director at the Moringa Partnership, the investment advisor of the fund.

“We have already reached roughly €70m and we are targeting €100m at the final close,” said Chenost.

The fund was launched in August 2013, achieving a first closing of €51.4m.

The fund’s investors are a mix of development finance institutions (DFIs) and private investors, but the biggest investor in the fund is AECID (The Spanish Agency for International Development Cooperation).

“We have several family offices. The fund’s co-founder is La Compagnie Benjamin de Rothschild, but we also have family offices from the UK and Belgium and we are currently in the discussion with other private investors for the second close,” he said.

Chenost described fundraising environment as “difficult”, however he pointed that there is a need to develop agroforestry sector in a sustainable way and it is a “very important topic for the DFIs”.

The fund will invest in profitable larger scale agroforestry projects with high environmental and social impacts in sub-Saharan Africa and Latin America (roughly 50/50 split) via equity and quasi-equity investments of €5 to €7m.

Moringa projects will produce staple food and export crops, biomass and timber for local and international markets.

The fund leverages the fact that agroforestry is inherently a sustainable practice to distinguish itself from other land-based investment approaches and to ensure that its projects are genuinely sustainable.

“In Africa, we are focused on East Africa (Kenya, Tanzania, Mozambique), West Africa (Ivory Coast, Ghana, Nigeria) and to fewer extent on the Congo basin,” said Chenost.

When asked about the Ebola outbreak, Chenost said they had one of the potential projects in Sierra Leone, but “it is clear that investments in these areas are frozen for the moment.” We need to have a better view on the evolution of the Ebola situation, but for the moment in Africa we are focusing our efforts in East Africa.”

The 12-years fund has a holding period of eight years and a strong and proprietary deal flow pipeline.

Chenost said that the investment period of the fund is five years in which they are planning to close 13-14 transactions.

“In 2015 our objective will be to do two to three transactions,” he added.

For Chenost, finding the right partner is critical: “We are working with local entrepreneurs that are developing these types of projects; we are also working a lot with industrial companies, because many of them are looking to supply timber or biomass, coffee or cocoa,” he said.

In addition to providing investors with an attractive return derived from a sustainable portfolio, Moringa projects will seek applicable third party sustainability certification.

They will contribute tangible and measurable benefits to local populations such as job opportunities and additional income and facilitate the provision of improved health and schooling.

“We are working in difficult countries, but there is also a major potential in these countries in terms of agricultural and forestry development. We want to develop sustainable agroforestry projects,” he said.

In terms of challenges Chenost mentioned the maturity of the projects.

“Clearly we are not working on the mainstream type of projects, so we need to support entrepreneurs to reinforce their own capacity to be able to develop projects,” he said.

The fund will also be associated with a grant-based Technical Assistance Facility.

Sponsored by CBR and ONF International (ONFI), the international subsidiary of the French Office National des Forêts, the fund will benefit from CBR back-office and investment platform, while ONFI contributes agroforestry technical expertise and regional presence in the Fund’s targeted geographies.