The Global Agriculture and Food Security Program (GAFSP) announced a $14 million allocation to the African Development Bank Group, over the weekend.
This is done through the Program’s second-generation private sector financing window, to benefit more than 1.5 million smallholder farmers and 500 agro-dealers and cooperatives.
It was launched in 2024, to blend the program’s grants with financing from multilateral development banks, to catalyze private sector financing for smallholder farmers, producer groups, agribusinesses and start-ups.
This first allocation from the track, will go towards the establishment of an Agro-Inputs Risk Sharing Facility, which is a $200 million fund to be hosted by the Bank, with a $10 million tranche of derisking capital.
An additional $4 million in grant resources, will support technical assistance designed to catalyse up to $200 million in private-sector lending for small- and medium-sized agricultural companies in Ethiopia, Uganda, Tanzania, Malawi, and Zambia.
Natasha Hayward, Program Manager for the Global Agriculture and Food Security Program, said “this first allocation demonstrates the appetite for funders to work together in this new model to solve an age-old challenge of finance for smallholder farmers: risk.”
She said the financing will help expand access to certified seeds, organic fertilizers, soil enhancers, mechanisation, and other inputs that help agribusinesses to withstand extreme and prolonged heat, water scarcity and other impacts of extreme climates.