Incubated

Angola Catalytic Finance Initiative

Country
Angola
Region
Africa
Impact Areas
Food systems and agriculture
Status
Design Phase
Credits © UNICEF/UN067894/Gonzalez

Financials

Progress in funding
9.6497731100178%
11,614,944 of 120,364,944 USD
Total requested (USD)
7,000,000
Allocated by Joint SDG Fund (USD)
250,000
Co-Funding (USD)
11,364,944
Total Funding (USD)
11,614,944
Leverage Target (USD)
102,000,000

Results

Hemera Capital Partners has been selected as a fund manager and a variety of partners expressed interest in capitalizing the first fund.



The programme

Why

Poultry meat is one of the most consumed meat in Angola, and yet 90% of poultry meat is imported as a result of lack of expertise and capital. The majority of Angola’s agricultural producers are Family Farmers who have limited access to training, markets, inputs and financing. Over 80% of agricultural producers are involved in subsistence farming. As such, the sector is characterized by low production and productivity, profitability, and competitiveness.


What

The Angola Catalytic Finance Initiative aims to reduce poverty and hunger through income and employment generation by using blended finance to fund farmers and MSMEs of the poultry and feed sectors. The ACFI will improve the livelihoods, and increase aggregation and earnings, of at least 4,000 FFs (60% women) by at least 39%, and enhance the investment and competitiveness of 120 micro, small and medium sized enterprises (MSMEs), including women and youth owned and led enterprises.


How

Two blended finance vehicles will be set-up to initially finance local poultry and poultry feed businesses and later expand to other agricultural value chain. The Angola Catalytic Fund will be capitalized first, with a target fund size of US$ 15 - 20 million, focused exclusively on the poultry value chain projects, incubated and supported by the fund's Capacity Building Facility and Deal Flow Facility. The Angola Expansion Fund, with a target capitalization of US$ 80 million, will invest in additional value chains.



Financial instruments

The Angola Catalytic Fund, managed by Hemera Capital Partners, will provide concessional loans to the poultry value chain, including integrators, non-bank financial institutions, small enterprises, and family farmers. These loans are expected to be at half the market interest rate, with 6 - 8 year terms, and will be backstopped by a US$ 7 million first lost layer. A potential pipeline of 33 key players in Angola's poultry value chain has already been identified.


The Angola Expansion Fund, as a follow-on fund to the Angola Catalytic Fund, offers a variety of blended finance instruments based on the lessons learned from the ACF. The AEF will scale up projects funded by the ACF, support additional projects identified by the Deal Flow Facility, and potentially expand the initiative into other value chains.


UN Implementers


FAO Logo
undp-logo
UNFPA

Partners


IFC
African Development Bank
Atlantico-Banco Millenium Atlantico
Angolan Development Bank (BDA)
ifad-logo
Coopera - Faje Credit Cooperative
angolia
  • Fund for Agriculture Development (FADA)

Latest

Impact Areas

Energy and climate action

This impact area covers financing solutions that leverage public and private resources for cleaner and more efficient energy systems and climate adaptation and mitigation action.

Energy accounts for two-thirds of total greenhouse gas, being the main contributor to emissions production. Despite 70% of clean energy investments are privately financed worldwide, in accordance to a special report developed by energy investments on clean energy in developing economies needs to expand by more than seven times, to above US$ 1 trillion, to put the world on track to reach net-zero emissions by 2050. Catalytic grants from the Joint SDG Fund are a critical bound to development finance institutions lending and attract private capital injections. Our portfolio brings financial solutions that span from lending and impact investing to insurance and smart subsidies. It aims to attract private investment to markets and sectors at early stages of readiness – or in situations where the risks are hard to mitigate, such as energy access projects for vulnerable communities or in remote areas.

Blue Economy

This impact area scopes financing solutions that leverage public and private resources for the blue economy.

The monetary value of the world’s oceans has been estimated at US$ 24 trillion by the World Wide Fund for Nature. This wealth is at risk because overfishing, pollution and climate change put an unprecedented strain upon marine ecosystems. Oceans are getting warmer, stormier and more acidic, impacting the health of sensitive marine ecosystems and the lives of human communities that rely on them. Ocean reefs, the home of the planet’s most diverse ecosystem, contribute to the livelihoods of at least 500 million people worldwide generating US$ 36 billion per year for the global tourism industry. Our programmes and pipeline in the blue economy space bring financing solutions that are adapted to the needs of island nations and coastal communities to preserve marine resources and coral reefs while offering income opportunities to coastal populations. They support scalable blue economy businesses, through equity and debt finance, risk guarantees, performance grants, incubation and technical assistance, to build resilience in coastal ecosystems and create jobs not only to allow us to save our planet, but also to build more resilient economies.

Food systems and agriculture

This impact area consists of financing solutions that leverage public and private resources for sustainable agricultural systems and enhanced food security.

Poverty is deeply intertwined with successes or failures in agriculture and food security, with the majority of the rural poor depending on agriculture and natural resources for their livelihoods. Recent estimates from FAO show that nearly 10% of the world population is still undernourished. The impacts of climate change, conflicts and Covid-19 pandemic take an even higher toll - resulting in an estimated 118 million more people suffering from hunger and one in three people not having access to adequate food in 2020. On the other hand, the ecological footprint of the global food system continues to grow in terms of energy, resource use, and the contribution to greenhouse gas emissions. To address these issues, the traditional approach to food policy must be reoriented towards food-system-wide approaches that provide incentives for investments in inclusive and sustainable development of food systems and for steering consumer behavior and food preferences toward healthier and more sustainable diets. Investments in food system innovations are key in driving change towards more a more sustainable and food secure future. Our programmes and pipeline in this area include solutions financial solutions that include microcredit and microinsurance, downscaling schemes from multilateral development banks, and a variety of blended finance facilities supporting agricultural supply chains, smallholder farmers, rural development, nutrition, and sustainable farming transitions. repurpose finance to support sustainable and resilient food systems, reduce finance that is destroying/degrading food systems, optimize finance to mobilize investment and increase access, and scale up public and private finance flowing to healthier diets. Examples include blended finance facilities, de-risking and collateral support mechanisms, sovereign and impacts bonds, business incubators, among others.

Social Impact

This impact area covers financing solutions that leverage public and private resources for social impact sectors including health, education, waste, water, and sanitation. These include Innovative financing concepts that improve the well-being of people and communities, especially vulnerable groups.

Leave no one behind (LNOB) is the central, transformative promise of the 2030 Agenda for Sustainable Development. LNOB not only requires the elimination of social practices that leave particular groups of people further and further behind, but it also demands equal access to basic services, resources and opportunities for all. This will come at a cost. Achieving LNOB will require significantly more financing than is currently invested in human and sustainable development, and for these funds to be channeled towards improving the lives of those who are furthest away from reaching SDG targets. Focusing on the social sectors, the Overseas Development Institute estimates that global financing requirements for education, healthcare, and social protection transfers alone amount to US$ 137 billion annually in low-income countries. While these sectors require large investments to make the required transition, they often rely on public funds. These are rarely the sectors that private funds invest in, as their objective is to earn a return that is higher than the initial investment, no matter how minimal. Therefore, our programmes and solutions focusing on LNOB innovate the way we finance and address these barriers and close the financing gap, by offering viability gap financing, early stage capital investments, de-risking mechanisms, smart subsidies, and technical assistance to empower people and early stage enterprises driving impact in key social sectors.