Kampala-The European Union (EU), the International Fund for Agricultural Development (IFAD) and the National Social Security Fund (NSSF) have launched a Yield Uganda Investment Fund to boost investment in the agriculture value chain.
An initial €12 million (Shs46b) has been made available to provide much needed access to capital for small and medium agri-businesses in Uganda.
This new impact Fund, being arranged by Deloitte Uganda and Pearl Capital Partners Uganda, is expected to attract additional €13m (Shs49.8b) by the end of 2017 to reach €25 million (Shs 95.8b) in total commitments.
The European Union Ambassador to Uganda, Mr Kristian Schmidt said the EU the anchor investor in the yield fund has contributed €10 million (about Shs38b) with National Social Security Fund contributing €2 million (Shs7.6b)
“This is a first of its kind to be funded by the EU where we are blending private equity and grants and we are proud that Uganda is a beneficiary. Yield Uganda Investment Fund is the result of continued efforts and commitment from the European Union to support the agribusiness sector by lowering the cost and risk of investments,” said Mr Kristian Schmidt.
He added: “This Fund will offer presently lacking long-term capital to entrepreneurs in the agricultural sector and contribute to the modernization and expansion of agribusinesses companies while providing quality financial returns for investors,”
Mr Matia Kasaija, the minister of Finance, Planning and Economic Development, while speaking during the launch of the yield fund, urged the stake holders to work hard to ensure the success of the fund. This he said can be done by following money to ensure it is well used. “Money when borrowed must be used for the purpose for which it is borrowed,” he said.
“Government has partnered with EU to establish the first ever agri business Small and Medium Enterprises (SME) fund in Uganda to spur growth and development. The fund will provide longterm capital resources for SME’s for growth related purposes,” Kasaija added.
Mr Alessandro Marini, the IFAD country director for Uganda, said engaging with the private sector in agribusiness development is a key priority for IFAD.
“Leveraging traditional modes of financing with innovative tools such as the Yield Fund is needed to fast track development, foster the transformation of the rural economy and ultimately achieve the Sustainable Development Goals by 2030,” he said.