- Date of agreement: The Agriculture Fast Track Fund was approved by the AfDB Board of Directors on May 8, 2013 and launched on May 9, 2013. The Multi-Donor Trust Fund will be effective in July 2013 (est.).
- Current volume of the fund: US $23 million
- Financial contributors: USA and Sweden
Background and Objectives
The Agriculture Fast Track Fund (“AFT”) builds on previous G8 and G20 commitments by supporting financially sound, environmentally sustainable, and socially beneficial food security projects. As a project preparation facility, the projects the AFT supports form a pipeline of bankable food security projects that support Africa’s agriculture transformation agenda. The AFT provides grant funds for project development costs such as feasibility studies, market research, financial modeling, business plan development, and environmental and social impact studies. The AFT increases the number of investment-ready agriculture infrastructure projects and public-private partnerships by defraying front-end project development costs and risks that commercial developers or other project sponsors are unable to shoulder alone. A modest amount of targeted donor funding can unlock hundreds of millions of dollars in concessional and commercial financing for agriculture infrastructure needs in rural Africa.
Areas of Focus / Sub-Sectors
The AFT will provide grant funding for the initial project development costs of a broad range of agriculture infrastructure projects spanning the entire value chain – from production to market. These can emanate from the private or public sector and from local or international businesses. The types of projects envisioned range from rural feeder roads to agro-processing and marketing facilities to out-grower schemes. The emphasis will be on projects that contribute to food security and support to smallholders.
Examples of the type of support the AFT could provide include but not limited to:
- An environmental/hydrological study for an irrigation system that would support smallholder crop production.
- A marketing plan for an agro-processing facility supported by a nucleus farm and corresponding out-grower scheme, which will create stronger market linkages for smallholders. This would include crops, livestock and fishery products.
- Financial Modeling for a joint venture to establish a crop/ livestock/ fishery products – processing operation focused on smallholder farmers that produce high-quality flour for the domestic market.
- An engineering study for the construction of an extraction and refining centre; a centre which would provide inputs and training to allow new smallholder farmers to enter the supply chain.
The AFT will initially operate in a small subset of countries (including Burkina Faso, Côte d’Ivoire, Ethiopia, Ghana, Mozambique, Tanzania – current members of the New Alliance for Food Security and Nutrition) that have entered into agreement with the G8 to refine their policies in order to improve investment opportunities and accelerate the implementation of their country‐led Comprehensive Africa Agriculture Development Programme (CAADP) plans on food security. After the initial pilot phase, the AFT will be extended to other countries that will have joined the New Alliance.
Administration and Governance Structure
- Coordination Unit: Responsible for the mandate of the AFT and its daily operations.
- Technical Review Committee: Ensures all proposals meet or exceed the technical, safeguard and fiduciary quality standards of the Bank. Approves grants up to US $500,000.
- Oversight Committee: Comprised of representatives from all contributing donors and responsible for general policy direction of the facility. Approves grants between US $500,000 to US $1,000,000.