IFC in Agribusiness Funds
October 14, 2010
IFC has invested over $100 billion in Emerging Markets since 1956
• Largest multilateral source of loan/equity
financing for the emerging markets private
sector
IFC FY10 Highlights
Portfolio *
$48.8 billion
Committed *
$18.0 billion
Mobilized
$ 5.3 billion
# of companies
1776
# of countries (portfolio)
129
# of countries (committed) 104
• Founded in 1956 with 182 member countries
• AAA rated by S&P and Moody’s
• Equity, quasi-equity, loans, risk management
and local currency products
* Includes for IFC’s own account and mobilization
• Takes market risk with no sovereign
guarantees
Composition of FY10 Transaction Volume
• Promoter of environmental, social, and
corporate governance standards
• Resources and know-how of a global
development bank + flexibility of a
merchant bank
• Holds equity in over 800 companies worldwide
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IFC invests across the Agribusiness Value Chain US$2.0 billion in FY 2010
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
Chemicals
Project/Corporate Finance
CIT – Access to Markets
Land
Inputs
Farm
Production
Collection
Processing
Marketing
Distribution
Infrastructure/Logistics
Financial
Institutions
Market
Infrastructure
Pre-Harvest Finance
Trade Finance
Risk Sharing Facilities
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Retail
IFC has significantly increased its agri-financing in recent years..
The active portfolio of agri-related investments was
$3.9 billion at FYE09 (excludes Trade Finance)
IFC'S COMMITMENTS IN AGRIBUSINESS BY FISCAL YEAR
2.0 bn 2.0 bn
2,000
1,800
1,600
$ Millions
1,400
1,200
IFC'S AGRIBUSINESS PORTFOLIO BY REGION
Agri-Wholesaling
Rural and Trade Finance
Fertilizers
Food Retail
Agri Infrastructure
Equity Funds
Agribusiness Production & Processing
1,000
Africa
6%
Europe and
Central
Asia
25%
1.3 bn
Middle
East/North
Africa
2%
South Asia
11%
1.4 bn
East Asia
11%
Latin
America
45%
848 m
800
400
200
IFC'S AGRIBUSINESS PORTFOLIO BY SECTOR
546 m
600
406 m
347 m
Equity
Funds
3%
483 m
304 m
Food Retail
12%
Fertilizers
6%
120 m
0
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10
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Agribusiness
Production
and
Processing
75%
Agri
Infrastructure
4%
… and developed a strategic response to food crisis
Short Term
Response
Medium Term
Response
Long Term
Response
• Provide liquidity
throughout the value
chain
• Trade finance
• Working capital
• Wholesaling finance
• Emphasize productive
land investments and
productivity gains
• Improve logistics,
product-to-market
efficiencies
• Improve supply chain
infrastructure
• Reform agenda:
regulatory / land / trade
policy
• Supply side response
through global
agricommodity players
• Technical programs on
the ground: access to
finance, access to
markets-linkages,
productivity support
• Trade finance
• Drive integration of
small farmers into
global agrisupply chain
… which also entails to increase productivity in agriculture
through investments in funds!
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IFC`s recent experience in Productive Land Projects
SE Europe
Global Land
Agri Fund
Regional Land Fund
- South America -
Land Development
- South America -
EUR 15 million
USD 75 million
USD 50 million
USD 50 million
Land Real Estate
Investment Trust
(REIT)
Agri-Land Focused
Fund Manager
Business Model:
• Acquire small agri-land
plots within the same
municipality
• Rent out to modern
farming company
• Realize value through
higher land productivity
translating into higher
land prices for REIT
• IFC to invest equity to
scale up operations
Regional Fund for
Land Consolidation
& Farm Development
Large-Scale Farm
Operator
Business Model:
• Identify and invest in
regional agricultural
farming and production
companies.
Business Model:
• Consolidates large
tracts of land (primarily
grazing land) and
develops for farming
purposes.
• Build companies into
scalable platforms by
providing growth
capital, increasing
productivity and yields
Business Model:
• Farms large tracts of
purchased or leased
land, creating
economies of
productive scale.
• Provides technical
expertise, including
use of best-in-class
techniques and inputs
• Provides technical
expertise, including
use of best-in-class
techniques and inputs
• Geographic and
product diversification
in strategic areas.
• Intent on rapidly
increasing size of
managed areas
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IFC`s Rational and Role in Investing in Funds
Investment Rational
IFC Value Added
Why is IFC considering investments in
funds?
What value does IFC add to the funds in
agriculture?
• Reach smaller agribusiness companies
which IFC is not able to target directly;
• Provide stamp of approval by assisting the
fund manager in structuring the Fund
according to international best practices;
• Support funds who aim to increase land
productivity, improve agricultural practices
and have a demonstration effect in
agriculture sector; and
• Disseminating of Corporate Governance
and E&S best practices; and
• Provide industry and regional expertise to
assist the funds.
• Support emerging fund managers to secure
the targeted fund size at closing.
IFC does not invest in funds with (i) an objective of land speculation, (ii) a narrow
focus (biofuel or single crop), and (iii) no relevant experience or management team.
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