Agri3 Fund

Investment Strategy
The Fund aims to provide guarantees to commercial banks and other financial institutions and subordinated loans to value chain clients to mobilise financing by de-risking and catalysing transactions that create sustainable, deforestation free agricultural supply chains
Geographic Focus

The AGRI3 Fund has a global scope and ambition, but with a focus on middle income (MICs) and lower income countries (LICs).1 The Fund will initially focus on Brazil, Indonesia and India, but with the ability and ambition to work across South-East Asia, Sub-Saharan Africa and Latin America. 

1 As defined by the OECD

The Fund aims to undertake transactions in a wide range and combination of crops and agricultural commodities. In the first instance, these are likely to be sugarcane, cattle, dairy, rice, soy and cotton. But other impactful sectors, such as palm oil, cocoa and livestock will also be considered.

The ultimate beneficiaries, or target group, of all transactions of AGRI3 will be farmers. The farmers can be approached either directly, through input suppliers, cooperatives or through off-takers (direct and indirect). Farmers will include large, medium, small and smallholder farmers.
*Eligibility criteria is included in the Fund’s Investment Policy

The Fund aims to de-risk and facilitate eligible investments for partner-banks. In this light, the Fund will focus on risk mitigation products (partial guarantees), although in some cases liquidity instruments (like subordinated loans) may also be considered.

In this respect, investment instruments at the inception of the Fund are:

Pari passu risk participation
Tenor extension
Maturity subordination
Subordinated guarantee
First loss risk participation
Transaction Size
The typical contribution by the Fund for each investment will be in the range of 3 – 15 million USD to enable projects from 5 to 50 million USD. Exceptions may apply, in case projects are larger than these limits, or pilot-projects that are smaller but scalable, provided they demonstrate significant impact.
Technical Assistance Facility

The AGRI3 Technical Assistance (TA) Facility has been established to accelerate the development of investable opportunities and maximise their impacts, as well as de-risk investments made by the Fund. The TA Facility is set up as a separate facility, managed by IDH The Sustainable Trade Initiative.

The TA facility will accompany the Fund in the following areas;

Project design support, to support projects to become investment-ready for the AGRI3 Fund, resulting in a strong and balanced pipeline of bankable projects. The intention is that TA provided should lead to a potential investment for the Fund within 24 months’ time.

To projects in the implementation phase, so that project developers have greater capacity to implement projects, resulting in reduced risk to the AGRI3 Fund and/or increased positive social and environmental impacts.

Supporting projects and the Investment Adviser in monitoring progress towards targeted impacts for adaptive management and reporting on the Fund’s impact KPIs.

Taking insights from transactions and publishing them in a variety of formats including workshops, publications and tools.