The Danish government and the Investment Fund for Developing Countries (IFU) contribute in collaboration with the two pension funds PensionDanmark and PKA with DKK 700m to the new Danish Agribusiness Fund (DAF).
The funds are expected to generate investments of close to DKK 6bn in improved production, distribution and food sales in developing countries. The Fund will invest in projects throughout the entire value chain from farm to fork, where a Danish commercial interest is included – thereby increasing the export of Danish technology and know-how.
– Danish agricultural and food companies are among the most efficient in the world. Consequently, these companies can help to increase the production of much-needed food in developing countries. However, there is a need for risk capital if the potential is to be realised. That is exactly what the new fund will contribute to. Accordingly, this initiative is in line with the global UN goal to increase private investment in the agricultural and food sector in developing countries, says Danish Foreign Minister Kristian Jensen.
The DKK 700m consists of DKK 88m from development aid, DKK 212m from IFU and DKK 200m from PensionDanmark and PKA respectively. The fund is expected to raise additional capital of DKK 100m in a second closing.
The Danish Agribusiness Fund will invest capital in projects in Asia, Africa, Latin America and parts of Europe. The fund will be operated on market conditions and will ensure the investors a competitive return.
– Like the Danish Climate Investment Fund, the Danish Agribusiness Fund is a good example of how public and private capital can work together to address global societal challenges in a way that benefits both Danish companies and investors. The two funds illustrate that the best form of development aid is business, says Torben Möger Pedersen, CEO of PensionDanmark.
– PKA has good experience with collaborating with IFU on investments in developing countries and because of this we expect to achieve good results with the partners in the new fund. By becoming part of the Danish Agribusiness Fund, we can make a positive difference in developing countries, strengthen the Danish economy and ensure a good return for our members, says Peter Damgaard Jensen, Managing Director of PKA.
IFU will manage the Danish Agribusiness Fund. IFU has experience from 1,200 investments in more than 100 developing and emerging countries in Africa, Asia, Latin America and parts of Europe. The total investments to date amount to DKK 165bn of which IFU has contributed DKK 17bn.
– We are very pleased that we have managed to bring private investors and public capital together in a fund that has such an important purpose. Because the Danish Agribusiness Fund only contributes with part of the investment in each project, we expect that the total investments will amount to around DKK 6bn, says Tommy Thomsen, CEO of IFU.