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ARAF closes at $58m

Staff writer
Aug. 9, 2021, 4:31 p.m.
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Word count: 683

The Acumen Resilient Agriculture Fund (ARAF), sponsored by Acumen and anchored by Green Climate Fund, has closed on June 30 at $58m, above its fundraising target.

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The Acumen Resilient Agriculture Fund (ARAF), sponsored by Acumen and anchored by Green Climate Fund, has closed on June 30 at $58m, above its fundraising target.

“ARAF’s impressive $58m close, $8m 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,” said ARAF’s Managing Director Tamer El-Raghy.

“Smallholder farmers feed the world, but they are among the most affected by the climate crisis. 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,” he said.

“Since we started deploying capital in 2020, our team has invested in five companies operating in Kenya, Uganda, and Nigeria,” he added.

ARAF provides critical capital to support African agribusinesses that help smallholder farmers adapt to climate change.

The fund’s investors include the Dutch entrepreneurial development bank (FMO), the Soros Economic Development Fund, the French development institution Proparco, the Children’s Investment Fund Foundation, IKEA Foundation, Global Social Impact, and other respected investors and funders.

“The Green Climate Fund is delighted to partner with Acumen to support innovative agribusinesses that enhance the climate resilience of smallholder farmers in Africa. GCF has supported the Acumen Resilient Agriculture Fund from the early concept phase and provided catalytic capital to unlock private investment into this first climate adaptation-focused agribusiness investment fund in Africa. The fund will make critical investments to support climate resilience and agriculture productivity for smallholder farmers across countries in East and West Africa and help shift the pattern of investment in climate change adaptation in Africa from grants to a long-term capital approach,” said Director of GCF’s Private Sector Facility Tony Clamp. 

ARAF uses blended finance to provide long-term support to small and medium-sized agribusinesses and through its $5m Technical Assistance Facility (TAF) that is designed to provide farmers with the hands-on support they need.

The TAF is funded by grants from GCF, IKEA Foundation, FCDO, and FMO.

“We are pleased to support ARAF as a lead investor. 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.

“The Soros Economic Development Fund is thrilled to support ARAF as a lead investor and help improve the climate resilience of smallholder farmers across sub-Saharan Africa. We believe ARAF can foster change by helping to seed, expand, or scale business models and restructure their relationship with powerful economic actors to empower smallholder farmers to improve their livelihoods and thrive. While initiated before COVID-19, this investment speaks to the moment by supporting vulnerable communities that are already disproportionally at risk” said Catherine Cax, Director of Investments at the Soros Economic Development Fund.

Through ARAF, Acumen is bringing the same approach to resilient agriculture and delivering catalytic investment to address the capital gaps for agribusinesses on their journey to scale. 

“The world’s poorest communities are often those hit hardest by the negative impacts of climate change. While wealthier people can afford to adapt, rebuild, and relocate, the poor are left to fend for themselves. At Acumen, much of our work focuses on helping low-income people, particularly farmers, adapt to and become resilient to climate change. That’s why we are so proud to sponsor ARAF and lead a group of committed investors to inject much needed capital into early-stage, integrated agribusinesses that will promote economic growth where it’s needed most and help us build a future with the sustainability of the earth at its center,” said Acumen Founder and CEO Jacqueline Novogratz.

“Leveraging institutional support often requires initial philanthropic commitments, which are rare in the impact sector. We are deeply grateful to IKEA Foundation for its philanthropic gift that played a vital role in the launch of this critical fund.” 

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