FAFIN, $100 Million Fund Established

The Fund for Agricultural Finance in Nigeria (FAFIN) is an innovative agriculture-focused investment fund that pro-vides tailored capital and technical assistance solutions to commercially-viable small and medium-sized enterprises (SMEs) and Intermediaries across the agricultural sector in Nigeria using quasi-equity, equity and debt instruments to structure investments. The three fund sponsors include the Federal Ministry of Agriculture & Rural Development, the German Development Bank (KFW) and the Nigeria Sover-eign Investment Authority (NSIA). On the 27th of January 2014, FAFIN had its first close with a capital commitment of US $34 million dollars.

About Sahel Capital

Sahel Capital is a leading fund manager and advisory firm focused on West Africa with deep roots in private equity, financial advisory, management consulting, and agribusi-ness. Sahel Capital was selected to manage FAFIN after three stages of official bids in competition with many Nigerian and international fund managers. Through an integrated ap-proach, Sahel Capital works closely with companies and in-vestment partners to deliver capital solutions and advisory services tailored to fit client’s unique needs.

Fund Information

  • Fund term – FAFIN has an initial 10 year life ex-tendable for three additional 1 year periods
  • Fund size – FAFIN’s target fund size is US $100 million, and it currently has $34 million in com-mitted capital from its first close.
  • Average Investment – The average investment size is US$ 3-5 million.
  • Target investees – small and medium sized enter-prises across the agricultural value chain in Nige-ria including input providers, producers, proces-sors, distributors and retailers.

Investment Objective

FAFIN is positioned to generate competitive financial returns for its Investors, thereby demonstrating the commercial viability of agricultural finance in Nigeria and attracting additional finance to the sector.

Investment Eligibility

FAFIN invests in agricultural SMES and intermediaries in Nigeria that have the following characteristics:

  • Track record of strong business performance: Historic or potential profitability
  • Significant growth potential: Potential to scale a well-defined strategic growth plan for the busi-ness
  • Trustworthy and competent entrepreneur or management team
  • Potential to develop a strong governance struc-ture
  • Competitive advantage
  • Exit potential: Plausible exit options within a reasonable timeframe and a suitable return
February 1, 2014

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