Netherlands Development Finance Company (FMO) has warned that if communities are to reduce the impact of climate change a holistic approach has to be adopted.
The company believes that reducing carbon emissions is not enough but there should be an increased need to invest in climate adaptation projects and climate resilience.
FMO director of agribusiness, food and water, Pieternel Boogaard, said: “Reducing carbon emissions is not enough to reduce the impacts of climate change. There is an increasing need to invest in climate adaptation projects and climate resilience,” he said, identifying smallholder farmers as key to this process.
FMO has invested in the Acumen Resilient Agriculture Fund (ARAF), which supports smallholder farmers in East and West Africa.
Run by investment firm Acumen, ARAF backs agribusinesses with funding and technical support, and those businesses, in turn, support the farmers.
Agribusinesses supported include those which provide climate resilience services, digital solutions and financial services. Acumen intends ARAF to be worth USD 50 million.
Boogard praised Acumen as an “innovative fund that aligns well with our strategy to invest in climate-smart agriculture as well as enhance food security, support sustainability and promote inclusive development”.
FMO’s other African investments include an agribusiness in Ivory Coast, West African energy projects, a South African fintech company and a technology-focused venture capital fund, while other development finance institutions (DFIs) including the United Kingdom’s CDC Group, Norway’s Norfund and Nigerian-headquartered Africa Finance Corporation, have all been active.
An Africa-focused agribusiness was sold to a Saudi mining company last year, while Egyptian Misr Hytech Seed International was bought by private equity and fund investors.