INVESTMENT OPTIONS FOR FINANCING AN ......Seed Multiplication Program as a commercial entity 1.2...

Investment options for financing an Incorporated Seed Multiplication Unit by Farrel Elliot

August 2012 1 | P a g e

GCP/SIL/032/GER

INVESTMENT OPTIONS FOR FINANCING AN

INCORPORATED SEED MULTIPLICATION

PROGRAMME

FAO/GERMANY COOPERATIVE PROGRAMME

For

MINISTRY OF AGRICULTURE, FORESTRY AND FOOD SECURITY



Contents Executive Summary ............................................................................................................ 3

1. Context of the exercise ............................................................................................. 4 1.2 Objective of the Report ............................................................................................ 4 2 Methodology: ................................................................................................................... 4 3. Consultative Meetings with the SMP ....................................................................... 8 4.0 Key findings ............................................................................................................. 9

RECOMMENDATIONS AND CONCLUSION ............................................................. 11 Domestic firms .................................................................................................................. 13 Hire Purchase and leasing ................................................................................................. 15 Commercial Banks ............................................................................................................ 15 International firms ............................................................................................................. 18

Challenge Funds................................................................................................................ 18

International Private Equity .............................................................................................. 21

Annex: ............................................................................................................................... 26



Executive Summary This report “Investment Options for financing an Incorporated Seed Multiplication Programme” aims to contribute to the on-going process of transforming the Seed Multiplication Programme housed in The Ministry of Agriculture and Food Security and is the result of extensive information-gathering via consultations locally and online communications with funding institutions interested in the agricultural sector in Sierra Leone The report presents the context and objective of the exercise as well as the methodology utilized by the consultant and the conclusions arrived at. We have identified three main sources of finance, debt, equity and grants and the profile of the funders and the criteria required for investment is detailed in the report. We also note the concerns from funding bodies that the nature and degree of the involvement of the Government in the operations of the company needs to be clarified for decisions to be made on financing the project. We would further suggest that more work be done to develop a business and valuation model that could be discussed with interested parties willing to invest in the project.



1. Context of the exercise 1.1 Background

The Government of Sierra Leone and its development partners are desirous of transforming the Seed Multiplication Programme housed under the Ministry of Agriculture and Food Security into a commercial enterprise more attuned to current market realities. In this regard, the consultant was contracted by the Office of Food and Agriculture Organisation in Sierra Leone to conduct a desktop study on the financing options for the Seed Multiplication Program as a commercial entity

1.2 Objective of the Report There are main objective for the preparation of this report is: An assessment of the available financing instruments that could be used for working capital and start-up investment financing and a presentation of suitable firms/investment companies with possible lines of financing for the proposed commercial seed multiplication company.

2 Methodology: The study was primarily desk – based via online research on suitable financing options based on similar models existing in other countries. The consultant also established contact with finance providers locally and internationally via meetings and email contacts. These meetings were semi-structured in nature guided by a questionnaire that the consultant had shared previously to ascertain the scale and scope of the funders’ involvement in agricultural based financing. Questionnaire is annexed. In addition, meetings with key national stakeholders primarily from FAO Sierra Leone and the National Seed Project of the Ministry of Agriculture and Food Security of the Government of Sierra Leone were also conducted.

The consultant in his analysis has been guided by three principal considerations which would be essential in determining the nature, quantum and structure of financing possibilities that a new commercial entity such as the proposed Seed Multiplication Company might be faced with.



These considerations are: (a) The need for the designers/promoters of the Seed Multiplication Company to

be able to articulate to potential funders the appropriate business model that the company intends to undertake to conduct a sustainable business and at the same time generate profit for its shareholders. The consultant has been briefed by the Project Manager of the Seed Project at the Ministry of Agriculture and the contact team at the FAO Offices in Freetown on a draft consultancy report on A Transformational Strategic Plan for The Seed Multiplication and Seed Quality Control Units. Although it would seem from this report that the current thinking might be a Public Private Partnership model, it is the view of the consultant that further work needs to be done with regards to determining what the costs and benefits of such a business model might be. These considerations have to be viewed in tandem with a clear legal structure for the operations of the proposed company. This would entail clarifying the shareholding structure and board voting rights of minority and majority shareholders and the degree of control or influence that the Government or its representative agency might have in the day-to-day management decision making. Such considerations are however beyond the scope of this report. The importance of this was seen in conversations with some financial providers who stated categorically that although they were involved in some limited agricultural based financing and would welcome the opportunity to invest in a proposed seed company, they were constrained by their operational charters not to invest in entities owned or financed either partially or wholly by the Government of Sierra Leone. At this current moment from the information and feedback gathered by the consultant, most funders were very wary of investing in operations in which the Government has a stake. Reference was made to the experience of parastatals currently being regulated by different ministries and the fact that even though twenty-four of these parastatals were slated for privatisation, the process has been fraught with multiple difficulties.

(b) The second consideration was the determination of working capital needed for the proposed Seed Multiplication Company to operate at its fullest efficiency. With respect to investment capital this could be viewed as cost which could be amortised over a period of time. For operations, working



capital for the purchase of seeds would have to be sourced. In this regard, the prime source of financing for short term needs especially in a seasonally affected industry such as agriculture was bank debt financing. However, it must be noted that current rates at most commercial banks at the lowest end of the spectrum exceed 21% per annum and taking into account the compounding of these rates and the servicing of these loans, although the assignment did not include the building of a financial model it is very much possible that the cost of capital might be in the region of 28 to 30% in real terms. Most of the banks we contacted were willing to consider a negotiated rate depending on the profile of the client and the scale of the investment. A profile of the schedule of rates offered by the banks interested in the SMP is shown below. We were informed that these rates show were indicative and could be revised upwards or downwards depending on the nature of the investment and all final investment decisions were subject to the banks’ in-house credit analyses. We must also sound a note of caution that the issue of interest rates should be only viewed as one of the variables in any investment decision either in the form of debt financing by the local banks or in the form of equity by local international funding bodies. These variables include current and potential market realities with regards to the growth and stability of the industry, the rate of return for any potential project, the degree and the scale of competition, political risk, availability and pricing of risk mitigation facilities by market and non-market means and especially in the case of equity finance the terminal values projected at the point of exit. Added to this would be a premium that would have to be factored into the cost of capital to be deployed into the projected.



Figure 1: Indicative rates obtained from local banks.

Bank Rate Tenor

First International Bank

Prime lending rate 23% (subject to negotiation + 6 % = 29% Loans 32% Project finance = 32%

Short term (90days to 6 months). 1 year Negotiable for periods above one hear

Rokel Commercial Bank

Prime lending rate 24%

Currently has a moratorim in place on loans

Sierra Leone Commercial Bank

Prime lending rate 21%

The rate could be negotiated based on the financing needs of the institution and the risk of the proposed venture.

Union Trust Bank Prime lending rate 26%

No commitment fee. Current limit of Le 60 million per project but would be willing to consider higher requests. Has a $10 million grant from the Kuwait Fund for the purposes of Agricultural Financing.

We would suggest therefore at this early stage in the design of the project that the company identifies publicly available and donor funded infrastructure and other public goods such as might be available in the Rural and Private Sector Project of the World Bank and the Agricultural Business



Centres being established by the Ministry of Agriculture that could greatly help to tighten whatever value chain activities the company may be involved in, which would in turn lessen overheads and operating costs.

(c) The third consideration was the provision of risk guarantees relating specifically to a functioning commercial enterprise suited for Sierra Leone. As discussed later, there were no insurance schemes relating to such an enterprise and as such this could have the effect to possibly pricing products (i.e. Certified seeds) offered by the company out of the local market even though these products might be genetically better in producing good returns.

3. Consultative Meetings with the SMP

3.1 Summary Outcome of meeting with Edward Gbappie

The consultant held a short meeting with Project Manger of the Seed Multiplication Programme (SMP), Edward Gbappie on the 11th of July 2012 and the key issues discussed and his concerns are summarized below.

The conversation centered on the need for the consultant to understand current arrangements undertaken by the National Seed Project to meet the needs of its current clientele and the transitional arrangements for its transformation into a commercial company. The consultant was briefed on the strategic transformation plan and the Seed Multiplication Unit’s marketing strategy which attempts to address market sizing and demand questions which in turn could have a deciding effect on the scale and complexity of financing products that the company would benefit from.

Initial assumptions from FAO suggest about $500,000 for working capital and roughly the same for investment capital. It is suggested by the consultant that a fuller financing and corporate model be developed to ascertain how these costs will be amortised and what the fee cash flows would be after operating and capital expenditures have been deducted.

The attractiveness of such a valuation would be a key consideration to any funder willing to invest debt or equity into the proposed seed company.



The discussing on the current business model of the Seed Multiplication Programme revealed that the relationship with the proposed company and the Sierra Leone Agricultural Research Institute (SLARI) was very weak and needed to be strengthened to ensure quality seed resources as certified seeds were not available at reasonable prices to most farmers. This affected yield as well as cost.

The Project Manager was also concerned that the absence of a national seed law was proving detrimental to the introduction and commercial distribution of quality genetic seed resources.

4.0 Key findings

Agriculture is the largest economic sector in Sierra Leone. Nearly two-thirds of the population depends on it for its livelihood and it is responsible for almost half of the country’s GDP. Therefore economic growth and poverty reduction in Sierra Leone will only be sustained with developments in the agricultural sector. As the sector expands, it will stimulate growth in other sectors through increased demand for tools and chemicals, as well as providing raw materials for agro-based industries. Also, it will generate employment along the agricultural value chain of input supply, production, agro-processing and marketing, including exportation. Such expansion will be more actively motivated with the availability of agricultural lending by commercial banks.

Access to financial services such as credit and savings facilities is extremely limited. This makes it difficult for farmers to access loans for the purchase of inputs and also to save money for consumption in the ‘hungry period’. Commercial agriculture (lending) is an essential tool in creating an enabling environment for agricultural activities.

This report is based on consultations undertaken with almost all the commercial banks in Sierra Leone namely International Commercial Bank, Zenith Bank, Rokel Commercial Bank, Sierra Leone Commercial Bank, Ecobank, Guaranty Trust Bank, Union Trust Bank, Standard Chartered Bank, Consumer Finance and Leasing Company a hire purchase business and online research into international private equity and financing companies with a footprint in Africa and special interest in Sierra Leone.



Based on this research it is deduced that only a small number of commercial banks do engage in some form of agricultural lending. The banks that do provide these facilities do mostly have hash terms of agreements. These banks do not give loans on all agriculture cultivation, processes and products. For instance the Union Trust Bank gives loans mostly on processing and marketing agric-activities and cover limited cultivation of products, the Sierra Leone Commercial Bank only gives loans for the processing and marketing of agricultural products and also Consumer Finance and leasing Company only provides limited leasing facilities for agricultural machinery. Their reason for this is that there is no insurance scheme that covers risk of loans to agriculture. It is also discovered that farmers who loans are given to do not either pay back on time or even pay at all and this has forced the banks to reduce its loan exposure to agricultural activities. In the area of working capital, banks engaging in agricultural lending do some provide funding, but there are limited facilities for asset finance.

The vast majority of banks that do not provide agricultural lending are mostly newly established private banks whose portfolio currently do not cover any agricultural lending and their customer base is relatively small. This is the case with banks such as Zenith Bank Sierra Leone, International Commercial Bank and the Guaranty Trust Bank. With respect to the proposed seed company there are three broad categories of potential funding possibilities; local banks providing debt finance, locally based private equity firms and international equity and grants Our discussions on whether these organisations would be willing to invest in the SMP were inconclusive even though they expressed an interest to consider the option if presented with such. In all of these cases one of the underlying concerns that we encountered was the nature and scale of Governmental influence in whatever final model was to be adopted as a mode of privatisation. Two of the banks we spoke with were either wholly owned by the Government of Sierra Leone (i.e. Sierra Leone Commercial Bank) or partially (Rokel Commercial Bank). Nonewithstanding this fact, they were concerned about the relationship of an outfit such as the proposed seed company with the Government. For the equity funds, local and international, the process would involve substantial due diligence and independent modelling of the financial assumptions to meet their expected rates of return.



RECOMMENDATIONS AND CONCLUSION With respect to international private equity firms and challenge funds there could be a possibility for the proposed Seed Company to benefit from funding. However, these options need to be considered alongside other options such a raising finance locally or regionally through private placement either by banks or brokerage houses as especially as in the case of challenge funds such as the Africa Enterprise Challenge Fund, funding is organised via competition windows. Thus said, if even the proposed Seed Company was to benefit from such a facility it might be some period of time before funds could be accessed as a lot of due diligence and capacity building work has to be done. If the company is already in existence by then, it could face serious constraints in meeting its operational costs and short-term funding needs. From the research it is deduced the number of banks engage in agricultural lending is relatively small and the demand for such loans is high, therefore other banks must be encourage to come on board.

Although we were not specifically requested in the Terms of Reference to speak with local insurance companies, we decided to from some of the concerns raised during discussions with some funding service providers and we were of the impression that a functioning insurance market for agricultural products such as seeds would in turn enhance better market pricing. We also theoretically explored the prospects of international loan and investment guarantees and possibly international factoring facilities and the influence such might have on reducing the rates being currently charged by the banks. Such facilities are not available locally and a number of the banks intimated that they would welcome such facilities as they believe the interest rates they charge customers could be revised downwards.

We suggest therefore that the Government of Sierra Leone and the FAO explore the possibility

of such guarantees being issued by the Multilateral Investment Guarantee Agency (MIGA) if a

positive decision is made to privatise the SMP.

Investment options for financing an Incorporated Seed Multiplication Unit by Farrel Elliot August 2012

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Domestic firms

Name of institution Type of business Financing profile Suitability for proposed seed corporation

West Africa Venture Capital Fund. Contacts: Sierra Leone Office: 19, Walpole Street, Freetown, Sierra Leone. Kennedy O. Ighodaro Country Manager of the West African Venture Fund LLC, Sierra Leone Email: [email protected]

Private equity Fund The West African Venture

Fund LLC (WAVF) is a

Mauritius registered Fund,

for investments in Liberia

and Sierra Leone.

It is a US$40 million

investment Fund that

provides capital financing to

emerging growth SMEs in

Liberia and Sierra Leone.

Its target deal size is

US$100,000 – US$500,000

with a goal of a minimum of

40 “Bottom of the pyramid”

SME Equity investments in

Liberia and Sierra Leone and

target returns of 25 - 30%.

WEST AFRICAN VENTURE CAPITAL FUND The company is involved in equity financing and are investing in companies such as agricultural companies and are willing to fund all type of agricultural produce with exclusion of palm oil. Investment should have a maximum value of $500,000 and a minimum of $100,000. It terms of tenor are commercial valuable, social dividend, no environmental impact, terms to collect is on returns.

There is a strong alignment with the aims of the West African Venture Capital Fund and the proposed Seed Company. However, there must be a demonstration that the proposed investment in the seed company would be able to generate returns between 25 – 30%.

mailto:[email protected]


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According to their website,

WAVF operates an

investment model based on

optimum combination of risk

capital, massive dose of

technical assistance services

and hands-on management

of investee companies to

achieve long term value

creation

They provide funding for asset finance and working capital and their terms are based on the nature of the contract.

Manocap Contacts: Tom Cairnes Manager/Founder Email: [email protected] 7 Spur Road

Freetown, Sierra Leone

Private equity fund The firm currently manages the Sierra Investment Fund and the ManoCap Soros Fund and together has $23.5m under management. Both funds are open to businesses from all sectors except mining, focused on doing business in Sierra Leone. Interested parties should contact the managing partners with a brief business plan outlining the deal, the money needed, and the returns that would be on offer for ManoCap.

The firm has expressed its willingness to consider opportunities in this space but it must be noted that the process of authorising investments tends to be very long due to its’ internal processes.



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Hire Purchase and leasing

CONSUMER FINANCE AND LEASING CO. Mr. Probyn Browne Marketing and Development Manager TEL: 078-600-144/ 033-664-904

Hire purchase and leasing firm

In the area of agriculture they cover specifically agricultural machines and tractors such as power tillers, harvesters, millers, tractors and so on. Payment is on a negotiated interest rate and the maximum value of such machines should not exceed one billon Leones. They will provide funding for asset finance but the facility is not yet operational and they will not fund working capital.

Funding will not be provided for working capital.

Commercial Banks


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ROKEL COMMERCIAL BANK . CONTACT Mrs. K. Salankole Head of Credit Tel: 077583843/ 033160696

Commercial Bank Type of products offered are cassava, maize, rice, palm oil etc and maximum value is close to a billion Leones. Terms of tenor are interest rate which is charged on the actual value and is paid monthly after a leverage time mostly six months. Funding could also be also provided for asset and working capital and terms are negotiated based on the nature of funding that the farmer/company seeks.

Strong funding possibilities due to its current portfolio and experience. However, a one of the partially owned government banks slated for privatisation there is currently a moratorium in place with for loans. Decisions on any investment would depend on a rigourous cost benefit analysis for the management to convince the board that the moratorium to be waived in any particular instance.

UNION TRUST BANK

Contact: Mr. A.F. Sam Mannah Manager, SME Department Tel: 076 377 829

Commercial Bank Its product offered is the cultivation, processing and marketing of rice, cassava, maize, sorghum. Investment should have a maximum value of Le 60,000,000 and a minimum of Le5, 000,000.

Strong funding possibilities due to its current portfolio and experience. However, this firm has stated that it will not fund any company with government exposure in terms of shareholding or control.


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Product structure depends on value of the loan given. Provides funds for asset finance, working capital and the terms are based on the value of the assets and value charged financing respectively and interest rate are mostly charged on this type of funding.

SIERRA LEONE COMMERCIAL BANK Contact: Mr. Habib Conteh Assistant Manager Tel: 076 65 58 89

Commercial Bank Type of products offered palm oil, processing and marketing of rice, cassava, sorghum and maize. Maximum value close to hundred million Leones. Terms of tenor interest rate mostly around the range of 18 to 20 percent. Provides funding for both asset and working capital and the structures are mostly monthly and after the leverage time given.

As the Sierra Leone Commercial Bank currently has the Government of Sierra Leone as its largest shareholder, the bank may be willing to consider the social dimensions of such an investment in addition to the pure business case.


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International firms

Challenge Funds

Name of institution Type of institution Financing profile Suitability for proposed seed corporation

Africa Enterprise Challenge Fund Contacts:

The Africa Enterprise Challenge

Fund Equatorial Fidelity Centre, Opposite New Safaricom House, Behind Shell Petrol station

3rd Floor Waiyaki Way Nairobi P O Box 13459-00100 GPO

Challenge Fund administered by KPMG Development Advisory Services.

What ideas is AECF prepared

to support? Each window has a special focus but the overall field is the set of value chains linking rural areas to their local and international markets, in services as well as goods.

Winning business ideas will

have a positive impact on the rural poor in Africa, delivering increased employment and income, reduced costs, and/or

The Africa Enterprise Challenge Fund (AECF) is a US$150m private sector fund funded by the Australian Government Aid Program, Danish International Development Agency (DANIDA), the UK Department for International Development (DFID), the International Fund for Agricultural Development (IFAD), the Netherlands Ministry of Foreign Affairs (NMFA), and the Swedish International Development Cooperation Agency (Sida). What is a Challenge Fund? Challenge funds are a mechanism for allocating and disbursing public funds

In principle the seed company could benefit from such funding but if must be noted that funding is organised in competitive cycles.


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Nairobi - Kenya O: +254 20 2699137 / 8 / 9

Hugh Scott

AECF Director [email protected]

Rose Ndung'u Operations Manager [email protected]

Dr George Manu West Africa Director Cell: +233 20 454 4 454 Cell: +44 7734 601 505 Office: +233 302 770454

+233 302 770618 [email protected]

Corin Mitchell Southern Africa Director Cell: + 27 83 233 3434 Office: + 27 11 647 6987 [email protected]

General Email: [email protected]

For information regarding a

improved productivity.

The competition rules favour ideas that promise profitable sustainability and provide evidence that the companies involved have the technical and financial capacity to

deliver. They will be innovative. They will have to make a convincing case for the need for AECF funding, answering the question, "why couldn't you do this with normal commercial finance?"

What amounts of money are involved? The maximum amount the AECF can award to a single business idea is US$ 1.5m and the minimum is US$ 250,000, although this amount may vary depending on the

competition. The average amount is expected to be around US$ 750,000.

efficiently and fairly. Organizations are invited to bid for scarce resources, not unlike a tender but where what counts is the quality of the response, not price. Rules are set and publicized, covering eligibility, the bidding process and the way that bids will be evaluated. Two separate bodies administer the process and decide on who gets an award, to avoid possible conflict of interest.

The intention is to get funds to the organizations that truly need them and can use them effectively to realize the broader aims of public policy; and to do this transparently. In the case of AECF the overall policy aim is to promote new

ideas that will lead to growth in the rural economies of Africa, generating employment and creating new opportunities for systemic change in the markets







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particular business idea/project submission email:[email protected]

that serve them.

How does the Africa Enterprise Challenge Fund work? The AECF is a competition, open only to for-profit private companies which are starting, or intend to start, new ventures

in specific fields. Companies are invited to submit proposals outlining their business idea or concept for funding.

What does the AECF offer? AECF offers Funding Windows targeted at specific economic sectors (including

research-based agribusiness, renewable energy and rural financial services), or at development corridors involving several countries.

Other windows may be added and each window will generally offer more than one Funding

Round for additional new applications.



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International Private Equity

INJARO AGRICULTURAL CAPITAL HOLDINGS LTD.

Injaro is derived from Kilimanjaro which in Swahili means ''Mountain of Greatness." Contact: [email protected]

Injaro is a private company formed under the laws of Mauritius and it is created as part of a merger and restructuring of two existing funds:

* West Africa Agricultural Investment Fund ("WAAIF"), a Mauritius domiciled fund created with the objective of investing in companies that produce and

* distribute seeds to smallholder farmers, and

* West Africa SME Growth Fund ("WASGF"), a Mauritius domiciled fund created with the investment objective of investing in small and medium

(Injaro) has been established with the aim of carrying out investment activities for advancing the social objectives of alleviating poverty and revitalizing distressed regions in West Africa.

Injaro makes investments in debt, quasi-equity, and equity in small-and medium-sized enterprises along the agricultural value chain in designated countries of West Africa.

The agriculture value chain encompasses the full range of activities and participants involved in moving agricultural products from input suppliers

Sierra Leone is one of the countries of focus for this fund.



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sized business in the region.

Both WAAIF and WASGF were private equity funds promoted and managed by Injaro Investments Limited ("IIL"). IIL was established in 2009 as an impact-oriented fund manager primarily focused on opportunities in West Africa. In addition to providing access to finance, Injaro will actively provide sound business advice as well as technical assistance to build managerial and financial capacity within investee companies.

to farmers' fields, and ultimately, to consumers' tables. The countries Injaro is focusing on are Ghana, Mali, Burkina Faso, Niger, Sierra Leone, Liberia, Guinea and Côte d'Ivoire.

AFRICAN AGRICULTURE FUND (AAF)

Investment fund managed by

Phatisa

CONTACT DETAILS

Anders Einarsson Deal Partner Email [email protected]

Sean Moolenschot Deal Partner

Investment fund managed by Phatisa

What is the relationship between AAF and Phatisa?

The African Agriculture Fund (AAF) is a limited life company (L.L.C.) incorporated in Mauritius. Phatisa Fund

INVESTMENT CRITERIA

The African Agriculture Fund (AAF), a US Dollar based food fund with a 10-year life, achieved a first closing at US$ 151 million and is targeting a final close of US$ 300 million.

This fund has a very strong alignment with the proposed seed company.

The fund also boasts of a technical assistance component that could be accessed to build the capacity of portfolio companies.

mailto:[email protected]?subject=AAF%20Investment%20proposal


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Email [email protected]

Managers Limited, incorporated in Mauritius, is the discretionary fund manager of AAF and responsible for the investment, monitoring value addition and the realisations of AAF.

Who are AAF’s investors? The target final closing capitalisation of AAF is US$300 million and Phatisa successfully first closed the Fund at US$ 151 million from the following leading international institutional investors:

Agence Française de Développement (AFD);

African Development Bank (AfDB);

Spanish Agency for International Development Cooperation (AECID);

Investment and Support Fund for Businesses in Africa (FISEA) acting by its manager Proparco;

Coverage: Pan-Africa, with a focus on sub-Saharan Africa.

Sectors: Full spectrum of businesses touching the food production value chain, including all major cereals, oils, proteins and their derivative products, from primary production, services, storage, fertilisers, seeds, supplies through to processing and branded consumer goods. Excludes non-food agriculture such as forestry. Investment strategy: To build regional platform businesses that increase capacity through commercial and smallholder schemes, seeking to re-integrate the food production value chain to enhance domestic and regional food security. Investment approach: Majority or significant minority stakes, board representation and other

What kind of businesses does Phatisa Fund Managers invest in? The Fund's priority investments are in food production and distribution in cereals, livestock farming, dairy, fruit and vegetables, beverages, FMCG food, crop protection, logistics, fertilisers, seeds, edible oils, smallholders and agri services in Africa with a focus on sub-Saharan Africa.

Phatisa will invest in transactions such as: management buy-outs and buy-ins, acquisitions, expansions, early stage equity (minority/majority), outgrower and smallholder developments.

The investment deal target is set between US$ 5 - 20 million.

Criteria for AAF to invest:

equity investment requirement of US$ 5 million

mailto:[email protected]?subject=Require%20more%20information%20on%20AAF%20and%20the%20investment%20criteria


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Development Bank of Southern Africa (DBSA);

Banque Ouest Africaine de Développement (BOAD);

ECOWAS Bank for Investment and Development (EBID); alongside

Phatisa.

meaningful shareholder rights. Investment type: Management buy-outs and buy-ins, expansions, acquisitions, refinancings and start-up new ventures with proven partners.

to US$ 20 million; experienced management

team with a compelling vision for the business and a willingness to collaborate with a financial investor;

proven financial, operational track record and potential for future growth;

commitment to transparency, proven sustainable industry competitive advantages; and

ability to achieve a profitable liquidity event in the medium term.

The entire Phatisa team is located in Africa (Mauritius, Kenya, South Africa, Zambia and Ghana) and spends a considerable amount of time developing relationships with strategic partners in all countries where the Fund is active.

SME subsidiary fund: The AAF has established a SME Fund, initially US$ 30 million (target size US$ 100 million) managed independently by Databank, called the AAF SME


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Fund. Investing up to US$ 4 million in any portfolio company. Technical Assistance Facility (TAF): Up to US$ 500,000 available per portfolio company for SME technical and development of outgrower schemes.


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Annex: Questionnaire administered to commercial banks in Sierra Leone

Name of Bank Involved in agricultural lending ( Yes/No)

If yes, what products are on offer If no, do you intend to introduce agricultural/agribusiness products within the next 6- 12 months?

INTERNATIONAL COMMERCIAL BANK

NO

Type of Product: Maximum value:

NO

CONTACT Mr. Alimamy Kamara

Terms of tenor: (Qualification conditions, interest rates, repayment period etc).

POSITION BANK SECETARY

Do you provide funding for asset finance? If yes: How is the product structured and what are your terms?

TELE 030-54-56-58

Do you provide funding for working capital? If yes: How is the product structured and what are your terms?


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ZENITH BANK SIERRA LEONE

NO


NO

CONTACT Mr. Ekepnisi Igumbor


POSITION COUNTRY HEAD OF OPERTION


TELE 088-31-71-11 078-28-18-93



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STANDARD CHARTERED BANK

NO


NO

CONTACT Mr. Emmanuel Conteh


POSITION SENIOR BANKING OFFICER


TELE 07-44-66-55



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GUARANTY TRUST BANK

NO


NO

CONTACT Mr. Moiwai Farmah


POSITION CREDIT OFFICER


TELE 033-70-48-89 077-87-30-84



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ECOBANK

NO


NO

CONTACT Mr. Richard C. Upkai


POSITION RELATIONSHIP OFFICER- LOCAL COPERATE


TELE 088-14-11-42 078-42-11-42



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ROKEL COMMERCIAL BANK

YES

Type of Product: The processing and marketing of Cassava, rice, maize, palm oil etc Maximum value: Close to Le 50,000,000

CONTACT Mrs. K. Salankole 077583843/ 033160696

Terms of tenor: (Qualification conditions, interest rates, repayment period etc). Interest Rate 24 % negotiable. Collateral such as land, house etc.

POSITION SENIOR FINANCE OFFICER

Do you provide funding for asset finance? Yes If yes: How is the product structured and what are your terms? Classified

TELE

Do you provide funding for working capital? Yes If yes: How is the product structured and what are your terms? Classified


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SIERRA LEONE COMERCIAL BANK

YES

Type of Product: The processing and marketing of Palm oil, rice, cassava, sorghum, maize etc. Maximum value: close to Le 100,000,000

CONTACT Mr. Habib Conteh

Terms of tenor: (Qualification conditions, interest rates, repayment period etc). Collateral, interest rate 21 percent negotiable.

POSITION ASSISTANT MANAGER

Do you provide funding for asset finance? Yes If yes: How is the product structured and what are your terms?

TELE 076-65-58-89

Do you provide funding for working capital? Yes If yes: How is the product structured and what are your terms?


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Name of Hire Purchase Business

Involved in agricultural lending ( Yes/No)


Consumer Finance and Leasing Company.

YES

Type of Product: Leasing of Agricultural machines such as tractors, power tillers, harvesters etc but not yet operational. Maximum value: Le 1 billion

CONTACT Mr. Probyn Browne

Terms of tenor: (Qualification conditions, interest rates, repayment period etc). Will be on interest rate but actual percentage of interest rate is still pending

POSITION Marketing and Development Manager

Do you provide funding for asset finance? Yes If yes: How is the product structured and what are your terms? Pending

TELE 078-600-144 033-664-904

Do you provide funding for working capital? No If yes: How is the product structured and what are your terms?


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Name of Company

Involved in agricultural lending ( Yes/No)


WEST ARFICA VENTURE CAPITAL FUND

YES

Type of Product: All product with exclusion of palm oil Maximum value:$500,000

CONTACT Mr. Wilbourne Showers

Terms of tenor: (Qualification conditions, interest rates, repayment period etc). Social dividend, no negative environmental impact, Commercially viable with prospects of good dividends.

POSITION SENIOR INVESTMENT OFFICER

Do you provide funding for asset finance? Yes If yes: How is the product structured and what are your terms? Value charged on the asset.

TELE 078-25-30-42

Do you provide funding for working capital? Yes. Depending on the value of the investment. If yes: How is the product structured and what are your terms?


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ACCESS BANK NO


NO

CONTACT Emmanuel Komba


POSITION CREDIT OFFICER


TELE 077-24-02-29



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UNION TRUST BANK

YES

Type of Product: The processing and marketing of rice, cassava, sorghum, cultivation of maize etc. Maximum value:Le60,000,000

CONTACT Mr. Sam Manneh

Terms of tenor: (Qualification conditions, interest rates, repayment period etc). Interest rate 26 percent.

POSITION MANAGER SMALL AND MEDIUM ENTERPRISE DEPT.

Do you provide funding for asset finance? YES If yes: How is the product structured and what are your terms? Value charged marketing.

TELE 076-377-829

Do you provide funding for working capital? YES If yes: How is the product structured and what are your terms? Value charged Finance marketing.

INVESTMENT OPTIONS FOR FINANCING AN ......Seed Multiplication Program as a commercial entity 1.2...

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