IFC and agribusiness in a changing environment

IFC event on GAFSP and climate smart agriculture RVO, Prinses Beatrixlaan 2, The photoHague – 28 October 2016

Executive summary

RVO and IUCN NL organized together with the International Finance Corporation (IFC) on 28 October a one-day event in The Hague in the framework of the World Bank Group-Netherlands strategic partnership ‘Food for All’. The event convened more than 80 professionals in the private sector, knowledge institutions, NGOs and policy makers engaged in agribusiness in developing countries.

IFC, the private sector arm of the World Bank Group, invests heavily in agribusiness in developing countries and emerging markets, and therefore has a great interest in exchanging experiences on investment opportunities, climate smart technologies and challenges in value chain operations. The main objective of the event was that both private sector and IFC bring current and upcoming activities and challenges in relevant countries to the table and explore opportunities for cooperation. This event was well received by the participants and some promising leads were established between IFC and several companies.

Main findings of the day

  • The GAFSP program (leaflet) aims to meet the sustainable development goals to end poverty and achieve food security in every corner of the globe by 2030. To achieve this, IFC searches for partners that comply with an ambitious, reputable and competitive profile. A partnership with IFC means that you construct a strong and long-term relationship and that you get valuable support in scaling and replicating your business case.
  • The event brought together supplier companies, value chain companies, NGOs, financial and knowledge institutions and policy makers that work agribusiness or related sectors. All organizations were engaged, shared experiences and helped each other in finding solutions.
  • The presentations from IFC and the bilateral meetings were very valuable to organizations that wanted to engage with IFC and GAFSP.
  • Finance for agribusiness in developing and emerging countries was the key topic of the day. Some participants had a focus on (empowering) value chains, others on the impact that investments could have on the global climate.
  • A conclusion was that in order to achieve impact in climate smart agriculture and reducing deforestation, private sector green value chain initiatives and private sector finance must be aligned with public finance and government programs that ensure the necessary land-use planning, enabling environments, legislation and landscape wide monitoring and verification of impact.

The main recommendations for doing business with IFC were:

  • IFC invests in strong and long-term partnerships.
  • The counterparty should be reputable and competitive, have a track record in the industry and have a demonstrable capacity to comply with the IFC standards and thematic interests of IFC. The projects have to be scalable and replicable.
  • IFC searches for blended finance solutions. The main products of IFC are long term loans.
  • In practice, there is almost no linkage between the private and public window of GAFSP.
  • Financial models should be as simple as possible. However partners that meet IFC’s criteria are scarce, so often financial schemes become complicated with complex stakeholder web to cover first and second loss.
  • In general there is enough money, but not enough bankable projects.
  • A challenge in financial structuring is to look cross-sectoral using a landscape approach.
  • Applying for an IFC product is a long term process. It is important to maintain contact with IFC during the application to show them progress in activities and improvement in bankability.

A team is at your disposal for advising you on how to work with IFC, how you can add value to IFC’s activities, and what to expect. Don’t hesitate to contact us:

commerijn.plomp@rvo.nl or Stephanie.broeder@minbuza.nl

 

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