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British International Investment (BII), the UK’s development bank, announced on Thursday, 20 February, its collaboration with Swedfund and Norfund to invest in AgDevCo, a specialist investor supporting smallholder farmers in sub-Saharan Africa.
The investment will support AgDevCo’s financing of small and medium-sized enterprises (SMEs) in rural areas producing high-impact crops, contributing to sustainable development and regional food security.
AgDevCo, founded in 2009, holds a portfolio of 40 SMEs across 11 countries in Sub-Saharan Africa, improving agricultural production in rural areas and bringing sustainable agriculture to small farms. BII’s $50 million investment comes on top of a previous investment of the same value, making BII AgDevCo’s biggest external investor. The Swedish and Norwegian investment funds will contribute a further $20 million and $15 million, respectively.
The investment will help AgDevCo expand its portfolio and support businesses to increase productivity and scale up sustainably. The company’s impact on small-scale agribusinesses in Sub-Saharan Africa has already been massive: over 2.4 million people benefited from opportunities linked to AgDevCo’s companies, ranging from access to markets to direct employment to support for rearing backyard chicken in individual households. AgDevCo estimates that thanks to the new investment, its portfolio will be able to deliver benefits to up to 4 million farmers and support 60,000 jobs by 2030.
Agricultural businesses in Sub-Saharan Africa face a range of challenges, from limited financing access and stunting growth to underdeveloped value chains and restricted access to global markets. Geopolitical instability and extreme weather events caused by climate change have made agriculture businesses more vulnerable. A drought in September 2024 was declared “the worst in a century” by the UN, which warned of a major humanitarian crisis that could affect the livelihoods of over 27 million people.
The investment will enable AgDevCo to expand its portfolio of SMEs in the region, especially targeting businesses producing high-nutrition crops for local consumption and crops intended for export. This is expected to improve the resilience and adaptability of Sub-Saharan African agriculture in the long term – a crucial step to strengthen supply chains worldwide. 10% of the EU’s food imports come from the region, and the UK’s food imports from Sub-Saharan Africa have been rising since the 1990s: 87% of UK imports of green beans come from just five African countries in the region as well as much of the fruits and vegetables sold in UK supermarkets, especially during winter.
Businesses like AgDevCo can support small-scale farmers to be more resilient to climate change and strengthen supply chains throughout the region, especially by improving access to crops in rural areas. “Developing commercial agriculture in Africa requires patient and strategic investment. […] This latest capital injection from BII, Norfund, and Swedfund strengthens AgDevCo’s position as a leading specialist investor, enabling us to grow our portfolio and drive positive impact at scale,” said Daniel Hulls, AgDevCo’s CEO.
