AAFTAF     
 
 
 
 
AAFTAF     
 
 

AAFTAF     
 
 
 
 
AAFTAF                                                                

Introducing the Technical Assistance Facility of the AAF

What is TAF?

The Technical Assistance Facility (TAF) aims to enhance the developmental impact of the African Agriculture Fund (AAF) investments by providing technical assistance and improved access to rural financial services. This assistance is provided to those outgrowers supplying AAF portfolio companies, and bottom of the pyramid (BoP) entrepreneurs distributing AAF portfolio company products. It also builds the capacity of the small and medium sized enterprises (SMEs) invested in by the AAF SME Fund.

AAF is an agri and food focused fund managed by Phatisa, an African private equity fund manager, servicing a range of sectors across sub-Saharan Africa. The Fund reached first close at US$ 151 million in November 2010, operations commenced in January 2011 and, within six months, the Senior Managing Partner, Duncan Owen, set the investment pace by concluding the AAF’s first investment in Sierra Leone, West Africa. The Phatisa fundraising team, led by Senior Partner, Stuart Bradley, pulled out all the stops to conclude final close in mid 2013 at US$ 246 million, backed by an impressive pool of multinational limited partners.


AAF invests in businesses throughout the food value chain with the goal of increasing food production in Africa and will make investments of US$ 5 to 24 million per company. The AAF made an initial commitment of US$ 30 million into an AAF SME Fund who reached a second close of US$ 36 million in early 2014. The AAF SME Fund's investment policy mirrors that of the AAF, the key difference being that the AAF SME Fund has an investment cap of US$ 4 million per transaction. The AAF SME Fund is managed by Databank Agrifund Manager Limited (DAFML, Ghana).



Who is behind TAF?


TAF is funded primarily by the European Commission and managed by the International Fund for Agricultural Development (IFAD). It is co-sponsored by the Italian Development Corporation, United Nations Industrial Development Organisation (UNIDO) and Alliance for a Green Revolution in Africa (AGRA). TechnoServe was appointed in 2011 to implement this facility. TechnoServe is a global Non Governmental Organisation (NGO), with more than 40 years experience catalysing private sector led inclusive economic growth in Africa. 



What impact will TAF have?


It is estimated that during its implementation, TAF will support at least 15,000 smallholder farmers in Africa, whilst the AAF is expected to directly create thousands of jobs ‑ and indirectly drive the creation of many thousands more. 



What technical assistance can TAF provide?

TAF is focused on building the capacity of its target groups; SMEs, smallholder farmers and farmer groups supplying AAF portfolio companies and BoP entrepreneurs distributing AAF portfolio company products. Including improving their access to markets and finance in order to enhance their productivity and income. This can include the following:

SME component Outgrower component
  • developing growth strategies
  • designing outgrower schemes
  • improving accounting standards and financial controls
  • organising/building the capacity of smallholder farmers and BoP distributors
  • supporting SMEs to overcome deficiencies that would otherwise preclude capital investment
  • providing technical assistance to farmer organisations
  • obtaining quality certifications
  • training farm service providers
  • conducting market research and improving market linkages
  • facilitating third party input finance

TAF can also fund projects to improve rural financing in the areas surrounding AAF portfolio companies. This may include: assessing demand for financial services on a gender disaggregated basis, mapping and disseminating information about rural finance institutions and related infrastructure, facilitating training for rural financial institution staff and, encouraging and enhancing new product development to better meet outgrower requirements. All TAF projects must deliver development outcomes with a particular focus on the number of direct and indirect jobs created, and the incomes increased by the projects. 


How does TAF operate?

As the TAF Implementation Agency, TechnoServe works with the Phatisa and DAFML fund management teams to:

  • Identify the Technical Assistance (TA) needs of AAF and the AAF SME Fund portfolio companies and their outgrowers,
  • Develop recommendations for TA support,
  • Identify,competitively select and contract TA providers to deliver this support; and
  • Manage the delivery of TA projects.


Prospective TA projects will be evaluated and approved by a TA Committee comprised of Phatisa, the AAF Advisory Board Chairman, DAFML, IFAD and other TAF donors. 

On approval of a project, TAF will manage a tender process to select the relevant service provider(s). The TAF team will monitor the implementation of all TAF projects funded by TAF and reserves the right to terminate projects in accordance with its approved procedures.

What is the AAF environmental and social policy?


The African Agriculture Fund (AAF or the Fund) embraces sustainable development practices in the portfolio company financing process by integrating social and environmental management principles into its decision-making through its Social and Environmental Management System (SEMS). You can read more about AAF's governance on the the Phatisa website.

What is AAF’s environmental and social due diligence and monitoring process?



To address key environment and social challenges, the TAF undertakes to conduct its business in an environmentally and socially responsible manner by ensuring that all portfolio companies financed by the Fund undergo an environmental and social risk assessment process. The level of environmental and social risk assessment undertaken for each portfolio company is determined by the portfolio company categorisation that is in accordance with IFC guidelines. These guidelines are based on the nature, size, proximity to environmentally and/or socially sensitive areas, complexity, and the perceived environmental and social adverse and/or beneficial impact of the portfolio company.


The environmental risk assessment is conducted during the Social and Environmental Due Diligence (SEDD) phase so that any potential adverse impact can be avoided or at least mitigated before the financing for the portfolio company is implemented. Environmental audits form an integral part of the monitoring programme and are conducted during the financing phase to ensure that conditions of approval are complied with.

 
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