What

The AGRI3 Fund aims to mobilise USD 1 billion of financing to enable a transition to more sustainable practices in agricultural value chains and avert deforestation. Specifically, AGRI3 will mobilise additional public and private capital at scale (including commercial banks, development finance institutions (DFIs), impact investors and institutional investors), in order to: 

• Prevent deforestation
• Stimulate reforestation
• Contribute to efficient, sustainable agricultural production and value chains
• Reduce carbon emissions
• Improve rural livelihoods

How

The Fund will provide guarantees to commercial banks and other financial institutions, and subordinated loans to customers of these institutions (known as ‘partner-banks’), to mobilise financing by de-risking and catalysing transactions that fulfil the fund’s aims.

By providing credit enhancement tools (such as guarantees) and technical assistance, the Fund will help catalyse private funding from commercial banks and their eligible partners to qualified initiatives. The Fund will stimulate initiatives that contribute to existing and innovative best practices in order to lower agriculture’s footprint and restore land use for agriculture and forest protection

The ultimate beneficiaries of all transactions of AGRI3 will be farmers. Therefore, each investment should improve rural livelihoods and on top of that focus on at least one of the following: sustainable land use or forest protection and reforestation.

Farmers can be approached either directly, through input suppliers, cooperatives or through off-takers (direct and indirect). Farmers will include large, medium, small and smallholder farmers.

The Fund aims to de-risk and facilitate eligible investments for partner-banks. In this light, the Fund will focus on risk mitigation products (partial guarantees), although in some cases liquidity instruments (like subordinated loans) may also be considered.

Technical Assistance

A Technical Assistance (TA) facility has also been established to accelerate the development of investable opportunities and maximise their impacts. The TA Facility is managed by IDH The Sustainable Trade Initiative and works closely with the Fund Manager and Investment Advisers.