Donald Kaberuka, the President of the African Development Bank (AfDB); Rajiv Shah, the Administrator of the U.S. Agency for International Development (USAID), and Gunilla Carlsson, the Swedish Minister for International Development Cooperation, have announced the creation of an Agriculture Fast Track Fund for Africa.
The three announced the creation of the US$ 23 million fund, designed to stimulate greater private investment in agricultural infrastructure in Sub-Saharan Africa, at the Grow Africa Investment Forum in Cape Town on Thursday.
The fund will serve members of the New Alliance for Food Security and Nutrition launched by the United States' President Barack Obama at the 2012 G-8 Summit. The six member countries of the alliance are Burkina Faso, Côte d'Ivoire, Ethiopia, Ghana, Mozambique, and Tanzania.
The fund is designed to strengthen the links between farmers, markets to consumers. Providing funding of up to $1.5 million per project, the Agriculture Fast Track Fund will finance feasibility studies, project design, market analyses, site surveys, business plans, financial modeling and other upstream activities that ensure project quality and bankability. These project preparation grants will facilitate access to more funding for agricultural infrastructure from banks and other investors.
The Agriculture Fast Track Fund was developed with the support of USAID, which has committed $15 million while the Government of Sweden pledged $10 million. The fund will be managed by the African Development Bank.
"The African economy is currently overly dependent on public investment for infrastructure development," Dr. Kaberuka said. "The Agriculture Fast Track is a critical tool to better leverage donor funding to catalyze private sector investment in support of infrastructure construction and Africa's long-term economic growth and food security."
The New Alliance has matched market-oriented regulatory reforms in the six member-countries with $3.7 billion in commitments for investment from the private sector. "Since the New Alliance for Food Security and Nutrition was founded last year, we've seen member countries make serious reforms that have led to real progress," said Shah. "The launch of the Agriculture Fast Track allows African farmers to take advantage of these reforms through fast-tracked infrastructure projects that will better deliver their products to markets."
"By targeting the project preparation stage of projects, the Agriculture Fast Track will advance infrastructure projects when funding is most acutely needed to pivot from planning to construction," said Carlsson. "This targeted approach allows us to catalyze significantly more private sector investments and ensure the highest standards in terms of social and environmental sustainability."
