IFC investment in Dutch Africa Improved Foods (Holding) (AIFH) in Rwanda

On July 7, 2015, the IFC and the AIFH have AIFHsigned an agreement for a $21.5 million loan and $4.5 million equity investment by IFC in AIFH. This loan comes with support from the Dutch-funded Global Agriculture Food Security Program (GAFSP), and is intended for the construction and operation of a 45,000 tons per year processing plant in Rwanda for fortified cereals to treat child malnutrition.

The investment will be channeled into a holding company, Africa Improved Foods (Holding) B.V. (AIFH) which will have a shareholding structure of 47% owned by a Royal DSM NV (DSM), 20% by IFC and the remaining equity held by other DFI’s. Via AIFH, an operating company, Excellent African Foods Limited (EAFL), will be established in Rwanda with AIFH having an approximate 90% equity stake in the EAFL, and approximately 10% owned by the Government of Rwanda.

GAFSP is a multilateral mechanism funded via the G20 with the objective of improving incomes and food nutrition security in low-income countries by boosting agricultural productivity. GAFSP funding plays a catalytic role to create opportunity to support innovative private sector investments and deliver a level of additionally and impact beyond what is possible through IFC’s regular operations.

The manufacturing process is fairly simple and involves sorting of maize and de-hulled soya bean with the latter then being cleaned, mixing and milling of these two raw materials, injection of soya oil into the mixed material, extrusion of the material, together with skimmed milk powder, drying, milling and thereafter the product is mixed with vitamins and minerals prior to packaging. All the equipment for the facility is to be provided by Buhler, an experienced milling equipment supplier. A storage buffer capacity will allow the Project to take advantage of attractive prices at the harvest period.

The intention is to source raw materials for the Project via existing farmer cooperatives in Rwanda and through the Government. In the event there is a shortfall in supply, this will be imported. A significant portion of the final product will be sold to the World Food Program (WFP) who will distribute the product in the broader region (Southern Sudan, Uganda, Burundi etc.), and to the Government of Rwanda; agreements in respect of the latter have been finalized. The remaining product will be sold on the open market.

The construction of the Project is expected to commence  October 1st 2015, though still to be confirmed, and on this basis the Project would be operational within 12-18 months depending on various factors. No contractors have yet been appointed for the construction phase.

More information on this investment can be found on the IFC website.

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