PFF2 is a second generation fund which builds on the success of its predecessor African Agriculture Fund (AAF), sponsored by the AfDB along with other DFIs including the French Development Agency (AFD), the International Fund for Agricultural Development (IFAD) and the Spanish Agency for International Cooperation and Development (AECID).
Phatisa, PFF2s fund manager, is a South-Africa based private-equity, corporate finance and advisory company operating across Africa.
The AfDB said that PFF2 aims to capitalise US$300mn to invest across Africa with a focus on Sub-Saharan Africa.
“It is projected to cover the entire African continent, with a sharper focus on Sub-Saharan Africa, relying on its presence in South Africa, Kenya and Zambia, Mauritius and London and a new office opening in Côte d’Ivoire,” according to the AfDB.
Presently, the fund targets average investment amounts of US$20mn in Cote d’Ivoire, Ghana and Nigeria in West Africa, Kenya, Tanzania and Uganda in East Africa and Mozambique, Malawi, Zambia and Zimbabwe in southern Africa.
PFF2 will focus on food and consumer related investments including integrated food production, processing, services and inputs, mechanisation, distribution, logistics and infrastructure, packaging, food services and retail.
Considering the largely underserved needs of agricultural financing in Africa, the fund’s investment policy entails the deployment of equity or quasi equity instruments to provide expansion capital in the majority of the cases.
PPF2’s investment strategy is aligned with the Bank’s High5 priorities of feeding and industrialising Africa. It is in line with the Bank’s Ten Year Strategy, focusing on inclusive growth, strengthening agriculture and food security and providing access to local finance.