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					          IFC Agribusiness in Africa
Africa Agri Forum, Livingstone – April 2010


 Anup Jagwani, Anchor for Agribusiness, Sub-Saharan Africa
  Terry Wyer, Sector Lead, AgriFinance, Sub-Saharan Africa
                   Agenda


• Overview
• IFC: Global expertise in Agribusiness
• IFC Agribusiness experience in Africa
• IFC’s Advisory Services
                 IFC is a Member of the World Bank Group

                   IBRD                          IDA                                              MIGA
                                                                            IFC                Multilateral
            International Bank             International
                                                                        International        Investment and
            for Reconstruction             Development
                                                                           Finance
             and Development                Association                                     Guarantee Agency
                                                                         Corporation

                 Est. 1945                   Est. 1960                   Est. 1956                Est. 1988


    Role:   To promote institutional,   To promote institutional,   To promote private      To reduce political
            legal and regulatory        legal and regulatory        sector development      investment risk
            reform                      reform

 Clients:   Governments of member       Governments of poorest      Private companies in    Foreign investors in
            countries with per capita   countries with per capita   member countries        member countries
            income between $1,025       income of less than
            and $6,055.                 $1,025

Products:   - Technical assistance      - Technical assistance      - Equity/Quasi-Equity   - Political Risk Insurance
            - Loans                     - Interest Free Loans       - Long-term Loans
            - Policy Advice             - Policy Advice             - Risk Management
                                                                    - Advisory Services




                Shared Mission: To Promote Economic Development and Reduce Poverty
     IFC – over $87 billion Invested in Emerging Markets since
                                1956
• Largest multilateral source of loan/equity                      •IFC FY09 Highlights
  financing for the emerging markets private
  sector                                                   •Portfolio                $42.5 billion
                                                           •Committed                $10.5 billion
• Founded in 1956 with 182 member countries
                                                           •Mobilized                $3.6 billion
• AAA rated by S&P and Moody’s
                                                           •# of companies 1,579
• Equity, quasi-equity, loans, risk management
  and local currency products                              •# of countries           85
                                                            Sub-Saharan        Middle East &
                                                               Africa            N.Africa      Global
                                                                17%                12%           2%
• Takes market risk with no sovereign
                                                                                                        South Asia
  guarantees                                                                                               12%

• Promoter of environmental, social, and          Europe &
  corporate governance standards                 Central Asia
                                                    20%

• Resources and know-how of a global                                                              Latin
                                                                   East Asia and
                                                                                                 America
  development bank + flexibility of a merchant                      the Pacific
                                                                                                  26%
                                                                        11%
  bank

• Holds equity in over 800 companies worldwide

                                                                                                                     4
                                     IFC’s Global Reach
                         100+ country and regional advisory services offices worldwide




Drawing on our experience and lessons-learned, we share sector best practices to the benefit of our clients.
                 IFC in Sub-saharan Africa
                         Algiers
                                         Mediterranean
               Rabat                          Sea               Beirut
                                                           Jerusalem      Amman
                                                           Cairo

                                                                                         Dubai




                                                                                      Sana’a
Dakar
                         Ouagadougou        N’Djamena

                               Lagos
    Monrovia              Accra
               Abidjan                 Douala
                                                                                          INDIAN
                                                                            Nairobi
                                                                  Kigali                  OCEAN
                                                Kinshasa
                                                                               Dar es Saleem
        ATLANTIC
         OCEAN

                                                     Lusaka

                                                                         Antananarivo

                                          Johannesburg
                                                                    Maputo
   IFC Hubs
   IFC Country Offices             Cape Town
                            IFC’s Products and Services
         Senior                        Structured                   Mezzanine                       Private
          Debt                          Finance                      Finance                        Equity

• On-lending                    • Partial credit               • Convertible debt            • Common shares
                                  guarantees
• Liquidity management                                         • Subordinated debt           • Preferred shares
                                • Securitization
• Acquisition financing                                        • Other Tier II
                                • Bond underwriting              instruments
• Warehousing facilities
                                • Credit
• Syndicated loans
                                  Enhancement

             Global Trade                             Advisory                          Sustainable
           Finance Program                            Services                           Finance
     • $1 billion program                  • Corporate governance                • Carbon finance
     • Guarantees to issuing banks         • Risk management                     • Renewable energy
     • 46 issuing banks in 24              • Small and medium                    • Supply chain financing
       countries                             business banking
                                                                                 • Corporate governance
     • 92 confirming banks in 62           • Housing finance
       countries
                                           • Energy efficiency finance
     • $579 million of issued
       guarantees in first 12 months
                Agenda


• Overview
• IFC: Global expertise in agribusiness
• IFC Agribusiness experience in
  Africa
                             IFC Value Add in Agribusiness

  Long-term            Regional         Global Sector                         Environmental       Sustainability
                                                           Country Risk
 Competitive                              Expertise                           & Social Risk          Toolkit
                      Knowledge                             Mitigation
  Financing                                                                    Management


 Equity             Extensive         40+ Years of     Government         Advice on          Local Supplier
                      Local Office       Sector            Relations           Environmental       Development
 Fixed/Floating
                      Network            Expertise                             and Social Best
  Rates, Local                                            Neutral broker                         Environmental/
                                                                               Practices
  Currencies         Local             Industry          Role                                    Social Advice
                      Transaction        Specialist                           Energy and
 Up to 15 year                                           Reduced Risk of                        Corporate
                      Experience         Advice and                            Water Use
  Loan Maturity                                            Expropriation,                          Governance
                                         Benchmarks                            Management /
                     Strong bank                          Breach of
 Flexible                                                                     Cleaner            Local
                      partnerships      Greenfield        Contract,
  Amortization                                                                 Technologies        Economic
                      through client                       Convertibility
  Profile                               Expansion/                                                Development
                      networks and                                            Equator
                                         Modernization    World Bank
 Catalyst for        B loan                                                   Principles         HIV/AIDS
                                                           Synergies
  other Investors     participants      Corporate                             Modeled after       Prevention
  and Lenders                            Strategy         Witholding Tax      IFC Standards
                     World Bank                                                                  Community
                                                           Benefit
 Equity              Synergies         Access to                            Local               Development
  Participation                          International                         Consultation        Funding
                     Joint Venture
                                         Investors                             and Disclosure
 Capital             partnership
  Mobilization        management
            IFC Investment in the Agribusiness Value Chain
                  Exceeded US$2.0 Billion in FY 2009
•    IFC’s Goal:
 •         Deliver development impact along the global agri-supply chain,
       through investments and advisory services with the private sector,
                to create opportunities and improve peoples’ lives
•Fertilizers
 and other                            •Project/Corporate Finance
Chemicals
                                                     •CIT – Access to Markets
    •Land
                       • Farm
            •Inputs                      •              •                •              •          •
                          •          Collection     Processing        Marketing   Distribution   Retail
                      Production
                                               •Infrastructure/Logistics


                                   •Financial                •Market
                                   •Institutions         •Infrastructure

                  •Pre-Harvest Finance                                •Trade Finance

                                         •Risk Sharing Facilities




                                                                 10
         Agribusiness – an IFC Strategic Priority

$2.9 Billion Committed Portfolio As Of June 30, 2009 (includes Syndications)


                  By Sector                                                      By Region
        Portfolio: Sector w/Syndications June 2009                          CAG Portfolio June 2009
                      Total: US$2.9 bn                                     w/Syndications (US$2.9 bn)
                                                                              Europe/
                  Other            Animal                                    Cent. Asia   Africa
                  9.9%           Processing                                               6.2%
                                   14.2%                                       6.0%
                                                                Cent. &                            East Asia
                                        Beverages                East.                              10.2%
  Other Food                              5.4%                  Europe
                                                                                                        Mid. East/
    22.3%                                                       15.0%
                                                Grains &                                                N. Africa
                                                 Milling                                                  1.3%
                                                  7.0%
                                                           South Asia
                                                  Dairy
                                                Products     10.6%
                                                  3.4%
                                               Fruits &                                                  South
                                              Vegetables                                                America
          Sugar                                 5.7%
                                                                  Cent.
                                                                 America                                 39.6%
          17.4%                    Veg Fats &
                                      Oils                        11.1%
                                     14.9%


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                    Agenda


• Overview
• IFC: Global expertise in agribusiness
• IFC Agribusiness experience in Africa
Fighting the Food Crisis in Africa
                       • Rising food prices have sent
                         100 million people back into
                         poverty, especially in Africa.


                       • IFC responds by investing in
                         African agribusiness. We build
                         clients' supply and distribution
                         systems, helping more food
                         reach more people affordably.

                       • The focus on Africa is part of a
                         global IFC agribusiness
                         portfolio that has tripled in
                         recent years.



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CAG-CAF Africa Portfolio by Sector - end FY09

             $160 million Committed portfolio *
                       (June 30, 2009)
                          Africa Portfolio



                                      Grain
Fruits and        Beverages         Processing              Aquaculture
Vegetables          25%                24%                      1%
   3%

                                                   Trading-
                                                  Wholesaling
               Cocoa-                                12%
              Onlending
                19%                 Plantations
                                       16%




                                                  14
Rubber sector: Salala Rubber (Liberia)

 •$29m project to rehabilitate plantation dilapidated during the
 civil war.
 •Increase productivity gains by new plantings and renovation of
 processing plant,
 •Rehabilitate social infrastructure (housing, schools, clinics)
 •$10m A loan



 • Provide loan with long tenor appropriate for plantation cycle
   and not available in post conflict environment
 • Political and country risk cover
 • Implement environmental and social policies and guidelines
 • Long term partnership with SocFin, one of the shareholders
Palm Oil sector: GOPDC (Ghana)

                            The Project
• $12.5 m to ensure reliable supply of FFB through new
plantings and replanting
• Improve competiveness by diversifying into value-
added refined oil and improve financial structure
• Financing: $12.5 m 9-yr A loan


                              IFC Role

• Provide long-term loans not available in local market
• Develop long-term partnership with an emerging regional player
• Institute environmental and social best practices and guidelines
              • Ghana Cocoa Sector – Short Term Funding
                                      Stanbic Ghana (SBG)
                                            •The Project
• “Hybrid” of Risk Sharing Facility (“RSF”) and Partial Credit Guarantee (“PCG”).
• Increases Stanbic Ghana’s activity in the sector by enabling it to exceed Single Obligor Limit to
 Licensed Buying Companies (“LBCs”), and exceed sector limits.
• Up to US$ 80m seasonal financing (< 1 year) to LBCs up from US$ 19 million in 2007-08 (2 LBCs).
• LBCs selected and appraised by IFC. IFC provides up to 50% PCGs to LBCs on an individual basis.
• Guarantees (can be) renewed on an annual basis.

            •IFC           •SBG             •Cocobod                                   •IFC Role
          Guarantee      Guarantees           Loans
                                                                               • Introduce to Ghana a new,
                                                       •LBC A                    innovative agribusiness
                                   •Cocobod            •LBC B     •Portfolio     guarantee product
                                                       •LBC C      of pre-
   •IFC               •SBG                                                     • Contribute sector
                                                                  approved
                                                       •LBC D                    Expertise
                                                                    LBCs
                                                       •LBC E    (Offtakers)   • Supplement SBG’s
                                                       •LBC F                    evaluation of LBCs – initial
                                  •Overdrafts
                                                                                 and on-going.


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    What IFC is Typically Looking for in Projects


•Strong and experienced sponsors
•Viable business plan that is fundamentally sound and
 does not rely on subsidies
•Conservative Debt to Equity Ratio (varies by project)
•Aggregate IFC lending amount of not less than US$5-
 10 million (varies by country)
•Willingness of company to work with IFC on acceptable
 E&S standards, financial reporting and good
 governance.
      So How Does IFC Support Small Scale
              Farmers in Africa?


•Providing long term capital to the financial
 sector for on-lending to Small Scale Farmers
•Risk Sharing Facilities
•Structured Finance
•Private Equity Funds
•Advisory Services
    IFC’s Africa Agri Finance Program

Partnering to help catalyze private sector investment in
         the Agriculture Sector across Africa




                                                  April 2010
Africa Agriculture Finance Program
         Investment + Advisory Services Approach
                                                       Wholesaling through Traders
       Corporate & Project Finance                    and Financial Institutions (FIs)
 • Provide long term financing – equity and      • Majority of farms/SMEs too small for
   loans – not otherwise available                 IFC reach but essential to the sector
 • Create long term partnerships with            • Field advantage of local intermediaries
   emerging industry leaders
                                                 • Financial & technical assistance to end
 • Promote best practice corp. gov.,               users via intermediary
   sustainability, Environ & Social stds
                                                 • Develop and promote sustainability best
 • Implement “further reach” programs to           practices through intermediary
   support farmers & small companies
                                                 • Instruments: Long Term finance, partial
 • Provide Advisory Services as “added             credit guarantees, risk sharing
   value” to IFC’s financing


                                        Advisory Services
             Project specific for farmers, SME development, supply chain linkages
         Market development of local supply to meet quality and quantity requirements.
             Pre/Post harvest implementation, Corporate governance and business
                                  transparency advisory services
Farmer Access to Finance
       Increased reach by working with Banks and other FI’s
                           Financial Institutions in Africa


    IFC Technical                                                       Farmers/
   Support Services                                                   Agribusinesses


                   Finance/
                 Risk Sharing                                 On-Lending



                                Financial Institutions in            AS to Farmers
                                        Africa                       and Organization
   IFC                          Lending Processes               Input financing
 Advisory                       Cash Flow Analysis              Basic efficiency training
 Services                       Management systems              Basic Finance Skills
                                Sector/market analysis          “Bankable” farmers


     Using a successful and proven IFC Africa platform to implement the program.
IFC’s Africa Agri Finance Program
          Components of the Program

1. Working with financial institutions and other
   intermediaries in Africa to build capacity using the
   global and regional experience that IFC Advisory
   Services has gained from such projects around the
   world.
2. Expand & improve lending to the agricultural sector and
   maximize profitability (sustainability) for the Bank.
3. Farmer and borrower support across the entire value
   chain. Extension services, financial literacy helping
   companies and individuals across the agri-sector access
   finance through financial institutions in Africa.
4. Knowledge building and dissemination at client and
   partner banks and externally with Agri sector clients and
   partners to help improve services across the sector.
5. Resources will be used in a flexible manner as needed
   for a sustainable implementation.
6. Advisory services and investment collaboration for
   better and deeper impact
     Africa Agri Finance Program

                     The Regional and Global Team

         Sub-Saharan Africa Dept          IFC Corporate Relations
        14 Fricker Road, Illovo, 2196   2121 Pennsylvania Ave., N.W.
         Johannesburg, South Africa     Washington, D.C. 20433 USA
              (27-11) 731 3000                (1-202) 473-3800


                 Terry Wyer                 Anup Jagwani
            IFC Corporate Advisory          IFC Investment
               Services Agribusiness          Agribusiness
                twyer@ifc.org              ajagwani@ifc.org




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