Seeking sustainable financial returns while mitigating socio-systemic risk
Nala Capital Partners has conceptualised the establishment of a specialised African agri-food systems fund, the Nala Food Systems Impact Fund I. The objective of the Fund is to seek Sustainable Financial Returns and to promote the achievement of the UN Sustainable Development Goals (“SDG”) in the medium to long term. Agriculture is a sector that can act as a thread of all the SDGs as it has the ability to address hunger, poverty, climate change, and energy use amongst others.
The Fund target size is ZAR500 million, with a ZAR50 million Technical Assistance (TA) facility which is a grant-based facility to support capacity building for black small and medium sized enterprises (SMEs) invested in by the Fund. The capacity building aims to improve linkages between aggregators, black smallholders, and the Funds portfolio entities, enhancing rural financing opportunities in communities where the Fund invests.
With an initial geographic focus on South Africa, the Fund is commodity agnostic with a strong bias towards high-potential growth commodities.
Management of the total risk of the Fund portfolio is aided by a policy of investing in a diverse range of vertically integrated agriculture projects/businesses across geographies and commodities.
Qualifying Criteria
- Established entities with 3-5 year track record;
- High-growth potential commodities;
- The majority shareholders must be involved in the day to day running of the business on a full-time basis; must be a SA citizen and minimum level 4 B-BBEE compliant;
- Pre- and Post- funding support (capacity building) conditional upon funding;
- Confirmation of market access is required where applicable or aggregation through our partnership scheme;
- Improvement in technical production and market linkages between aggregators, processors and black smallholder farmers;
- Grant contribution, blended finance or own contribution to maintain debt/gearing ratio and demonstrate repayment ability of facilities applied for; and
- The entity must be conducted with a profit motive and be economically viable.
“Mapping the path to transformation and financial inclusion.”
Nala Capital Partners
Nala is a specialised Food Systems Impact Fund restoring dignity to the African continent through the fusion of financial, social, and environmental returns.