By Deborah Kan and Maggie Lu Yueyang
HONG KONG, June 8 (Reuters) - U.S. private equity firm TPG Capital [TPG.UL] sees opportunities in China's clean tech sector and financial restructuring, its top dealmaker said in China.
"We will focus on new and emerging sectors, for instance, new tech, clean tech or health care," Mary Ma, partner and managing director at TPG said in an interview with Reuters Insider. "These are really high-growth and high potential sectors in China."
Although large buyout cases are rare in China, Ma still believes a lot of deal opportunities are likely to come out in a year or two, especially in the financial investment industry.
"I still believe that there is some sort of restructuring cases coming out, not only the SOE's (state owned enterprises, but also the private companies," she said.
Ma didn't confirm market talk that TPG is going to set up a RMB fund, but she said that "definitely with RMB fund we can see more opportunities".
TPG, which has been present in China for 15 years, will accelerate its localization in the country with some hiring plans, added Ma, who joined TPG three years ago from Lenovo (0992.HK: Quote, Profile, Research, Stock Buzz), the Chinese personal computer-maker.
In May, the private equity firm made a $2.4 billion profit, sixteen times its money on a six-year investment in a Chinese lender, Shenzhen Development Bank. (Reporting by Maggie Lu Yueyang; Editing by Anshuman Daga)
NEWS - Commodites, Agriculture, Green Investment - NEWS
6/09/2010
AgBank dismisses reports China asking for IPO delay
By Victoria Bi and Jason Subler
SHANGHAI, June 9 (Reuters) - An executive with the Agricultural Bank of China on Wednesday dismissed as "nonsense" reports that its government shareholders were pushing it to postpone its planned share issue due to weak market conditions.
The Hong Kong-based South China Morning Post on Wednesday cited two unidentified sources involved in the offering as saying AgBank's two state shareholders -- the Ministry of Finance and Central Huijin -- wanted AgBank to postpone its listing as it was having a difficult time drumming up interest in the sale.
Central Huijin is the domestic arm of the country's sovereign wealth fund.
Contacted by Reuters by telephone, AgBank [ABC.UL] Vice President Pan Gongsheng said reports that Beijing was pressing for a delay of the massive share issue had no grounding in fact. Some domestic media outlets have also suggested the government was pushing for a delay of the IPO.
"Many potential investors have expressed great interest," Pan said, in AgBank's first public denial of the reports.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For AgBank TAKE A LOOK [ID:nSGE65307X]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
AgBank is expected to obtain formal approval from China's securities regulator for the Shanghai portion of its dual listing on Wednesday, and to get the green light from Hong Kong's stock regulator a day later.
However, the timing of the listing, which could be the world's largest, is still unclear, and the weak stock market and flood of fundraising plans by other lenders and companies have created some uncertainty about how much it will ultimately raise.
A Reuters poll of 18 fund managers, strategists and analysts conducted this week suggests AgBank could command a valuation of 1.5 times its book value.
That would mean AgBank could raise close to $20 billion, far from the $30 billion that sources with direct knowledge of the process have said it was initially aiming for, which would have made it the world's biggest IPO ever
SHANGHAI, June 9 (Reuters) - An executive with the Agricultural Bank of China on Wednesday dismissed as "nonsense" reports that its government shareholders were pushing it to postpone its planned share issue due to weak market conditions.
The Hong Kong-based South China Morning Post on Wednesday cited two unidentified sources involved in the offering as saying AgBank's two state shareholders -- the Ministry of Finance and Central Huijin -- wanted AgBank to postpone its listing as it was having a difficult time drumming up interest in the sale.
Central Huijin is the domestic arm of the country's sovereign wealth fund.
Contacted by Reuters by telephone, AgBank [ABC.UL] Vice President Pan Gongsheng said reports that Beijing was pressing for a delay of the massive share issue had no grounding in fact. Some domestic media outlets have also suggested the government was pushing for a delay of the IPO.
"Many potential investors have expressed great interest," Pan said, in AgBank's first public denial of the reports.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For AgBank TAKE A LOOK [ID:nSGE65307X]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
AgBank is expected to obtain formal approval from China's securities regulator for the Shanghai portion of its dual listing on Wednesday, and to get the green light from Hong Kong's stock regulator a day later.
However, the timing of the listing, which could be the world's largest, is still unclear, and the weak stock market and flood of fundraising plans by other lenders and companies have created some uncertainty about how much it will ultimately raise.
A Reuters poll of 18 fund managers, strategists and analysts conducted this week suggests AgBank could command a valuation of 1.5 times its book value.
That would mean AgBank could raise close to $20 billion, far from the $30 billion that sources with direct knowledge of the process have said it was initially aiming for, which would have made it the world's biggest IPO ever
6/08/2010
Premier fonds africain de développement durable «focus forêt»
02-06-2010
L’agence britannique de développement (CDC) a consacré 50 millions de dollars ce mercredi 2 juin dans le premier fonds de capital investissement dédié à la forêt en Afrique subsaharienne.
Le GEF Africa Sustainable Forestry Fund (GASFF) sera géré par le fonds Global Environment Fund (GEF), un professionnel connu qui compte dans son portefeuille plus de 1 milliard de dollars sous gestion. Le premier closing de la GASFF, intervenu le 24 mai dernier, était fixé à 84 millions de dollars, souscrits entièrement par l’agence britannique CDC, initiatrice du projet, à hauteur de 50 millions de dollars et par des institutions de développement. L’implication du secteur privé, prévue dans un second temps, portera la taille du fonds à 150 millions de dollars.
Dans l’angle de tir, l’exploitation de 5 à 10 forêt africaines déjà identifiées. Le fonds investira dans des projets moyens de 15 à 30 millions de dollars dans des pays à potentiel forestier élevé comme le Mozambique, la Tanzanie, le Swaziland, l’Afrique du Sud, l’Ouganda, le Ghana, le Malawi et la Zambie.
Les initiateurs du fonds entendent surfer sur la demande grandissante de l’industrie de la construction, de l’énergie et du bio diesel. «le CDC est l’artisan de la création de ce fonds, première du genre en Afrique. De l’identification du besoin, à la sélection du manager, à la souscription de 50 millions de dollars. Nous continuons à jouer notre rôle dans l’apport des investissements vitaux et de l’innovation dans les pays en développement », explique Richard Laing, patron de CDC. Il faut dire que le lancement des mécanismes pour la réduction des émissions de carbone favorise la rentabilité de tels investissements
L’agence britannique de développement (CDC) a consacré 50 millions de dollars ce mercredi 2 juin dans le premier fonds de capital investissement dédié à la forêt en Afrique subsaharienne.
Le GEF Africa Sustainable Forestry Fund (GASFF) sera géré par le fonds Global Environment Fund (GEF), un professionnel connu qui compte dans son portefeuille plus de 1 milliard de dollars sous gestion. Le premier closing de la GASFF, intervenu le 24 mai dernier, était fixé à 84 millions de dollars, souscrits entièrement par l’agence britannique CDC, initiatrice du projet, à hauteur de 50 millions de dollars et par des institutions de développement. L’implication du secteur privé, prévue dans un second temps, portera la taille du fonds à 150 millions de dollars.
Dans l’angle de tir, l’exploitation de 5 à 10 forêt africaines déjà identifiées. Le fonds investira dans des projets moyens de 15 à 30 millions de dollars dans des pays à potentiel forestier élevé comme le Mozambique, la Tanzanie, le Swaziland, l’Afrique du Sud, l’Ouganda, le Ghana, le Malawi et la Zambie.
Les initiateurs du fonds entendent surfer sur la demande grandissante de l’industrie de la construction, de l’énergie et du bio diesel. «le CDC est l’artisan de la création de ce fonds, première du genre en Afrique. De l’identification du besoin, à la sélection du manager, à la souscription de 50 millions de dollars. Nous continuons à jouer notre rôle dans l’apport des investissements vitaux et de l’innovation dans les pays en développement », explique Richard Laing, patron de CDC. Il faut dire que le lancement des mécanismes pour la réduction des émissions de carbone favorise la rentabilité de tels investissements
6/07/2010
SilverStreet Fund Focuses on Agriculture in Africa
28 May 2010 SilverStreet’s farmland fund seeks sustainable yields of crops — and investments.
Gary Vaughan-Smith is no slouch at growing assets. As head of ABN Amro Asset Management’s alternative investment group, he boosted assets from less than $50 million to more than $5 billion in just five years. Now he wants to apply the same skill to growing crops. As a founding partner of London-based SilverStreet Capital, he aims to buy up farms in Africa; raise productivity by using sustainable agriculture, such as no-till farming; and sell the produce domestically. He also wants to teach local farmers better techniques.
“The problems with food production in Africa arise from the low productivity on the part of small-scale farms — and the majority of Africa’s farms are small-scale,” says Vaughan-Smith. “We thought that if we could improve that scenario by training people to farm more effectively and getting productivity up, agricultural communities across the region could boom.”
He also learned that the interest of pension funds, postcrash, in real-asset strategies providing robust diversification and steady income was considerable. And he found the funds also had an appetite for social accountability. So he focused SilverStreet’s flagship Silverlands Fund on agriculture in Africa, in part because he knows the continent well. Vaughan-Smith, 46, grew up in Zimbabwe’s capital, Harare, and received a BA in mathematical statistics from the University of South Africa before earning a master’s in finance from the University of Cambridge.
He sees enormous potential. Although Africa possesses roughly one third of the world’s arable land and some of its best soil, it suffers from chronic food shortages. Most farmers have little access to high-quality seeds and fertilizer and don’t know how to prevent erosion and nutrient depletion. More-sustainable practices, Vaughan-Smith contends, can produce tremendous yields: On commercial farms in parts of Zambia, corn output rivals that in the U.S.
Vaughan-Smith and his team of seven professionals — which includes 17-year Gartmore Investment Management veteran Edwin Doeg, who joined SilverStreet in 2008 — are scouting for commercial farms in five countries — Malawi, Mozambique, Tanzania, Uganda and Zambia — where conditions are deemed to be the most favorable. Although the fund will concentrate initially on row crops like wheat, corn and soybeans, it plans to branch into sugarcane, fruit, tea and livestock. African farmland is still cheap. A hectare in Zambia sells for $1,500, says Vaughan-Smith, compared with $9,600 for a comparable-size plot in the U.S. corn belt.
Nevertheless, finding suitable farms is not easy. “Buying land in Africa is very inefficient,” he says. “There is no way to go into a central database and see which farms are for sale, and for what price — you have to have a very good network of contacts in the country and an ability to source potential acquisitions.”
The team plans to develop training hubs at each of its major agricultural centers. Education has been delegated to a charity, Foundations for Farming. Silverlands’ farm management team intends to help local farmers by giving them better access to high-quality seeds and fertilizer, helping them negotiate group discounts and providing assistance in buying, processing and distributing locally grown crops.
Farming takes patience, and that goes too for investing in farming. A private equity fund, Silverlands has an investment cycle of ten years, with a 2 percent management fee and a 20 percent performance fee (over an absolute hurdle of 7 percent). SilverStreet has raised $100 million so far and will close Silverlands at $300 million. “I find it really exciting to be able to bring this sort of investment capital to Africa,” says Vaughan-Smith. “There is so much we can do to have a positive social impact.”
Gary Vaughan-Smith is no slouch at growing assets. As head of ABN Amro Asset Management’s alternative investment group, he boosted assets from less than $50 million to more than $5 billion in just five years. Now he wants to apply the same skill to growing crops. As a founding partner of London-based SilverStreet Capital, he aims to buy up farms in Africa; raise productivity by using sustainable agriculture, such as no-till farming; and sell the produce domestically. He also wants to teach local farmers better techniques.
“The problems with food production in Africa arise from the low productivity on the part of small-scale farms — and the majority of Africa’s farms are small-scale,” says Vaughan-Smith. “We thought that if we could improve that scenario by training people to farm more effectively and getting productivity up, agricultural communities across the region could boom.”
He also learned that the interest of pension funds, postcrash, in real-asset strategies providing robust diversification and steady income was considerable. And he found the funds also had an appetite for social accountability. So he focused SilverStreet’s flagship Silverlands Fund on agriculture in Africa, in part because he knows the continent well. Vaughan-Smith, 46, grew up in Zimbabwe’s capital, Harare, and received a BA in mathematical statistics from the University of South Africa before earning a master’s in finance from the University of Cambridge.
He sees enormous potential. Although Africa possesses roughly one third of the world’s arable land and some of its best soil, it suffers from chronic food shortages. Most farmers have little access to high-quality seeds and fertilizer and don’t know how to prevent erosion and nutrient depletion. More-sustainable practices, Vaughan-Smith contends, can produce tremendous yields: On commercial farms in parts of Zambia, corn output rivals that in the U.S.
Vaughan-Smith and his team of seven professionals — which includes 17-year Gartmore Investment Management veteran Edwin Doeg, who joined SilverStreet in 2008 — are scouting for commercial farms in five countries — Malawi, Mozambique, Tanzania, Uganda and Zambia — where conditions are deemed to be the most favorable. Although the fund will concentrate initially on row crops like wheat, corn and soybeans, it plans to branch into sugarcane, fruit, tea and livestock. African farmland is still cheap. A hectare in Zambia sells for $1,500, says Vaughan-Smith, compared with $9,600 for a comparable-size plot in the U.S. corn belt.
Nevertheless, finding suitable farms is not easy. “Buying land in Africa is very inefficient,” he says. “There is no way to go into a central database and see which farms are for sale, and for what price — you have to have a very good network of contacts in the country and an ability to source potential acquisitions.”
The team plans to develop training hubs at each of its major agricultural centers. Education has been delegated to a charity, Foundations for Farming. Silverlands’ farm management team intends to help local farmers by giving them better access to high-quality seeds and fertilizer, helping them negotiate group discounts and providing assistance in buying, processing and distributing locally grown crops.
Farming takes patience, and that goes too for investing in farming. A private equity fund, Silverlands has an investment cycle of ten years, with a 2 percent management fee and a 20 percent performance fee (over an absolute hurdle of 7 percent). SilverStreet has raised $100 million so far and will close Silverlands at $300 million. “I find it really exciting to be able to bring this sort of investment capital to Africa,” says Vaughan-Smith. “There is so much we can do to have a positive social impact.”
6/04/2010
Global food prices plummet, UN reports
The cost of the average food basket is 69 per cent higher than six years ago
3 June 2010 – International prices of key food staples dropped in the first five months of this year, driven largely by plummeting prices of cereals and sugar, according to a new United Nations Food and Agriculture Organization (FAO) report.
The FAO Food Price Index – the average of commodity prices, including meat and dairy – averaged 164 points in May, down from 174 in January and substantially less than its peak of 214 reached in the spring of 2008.
Sugar prices have plunged by half from their peak earlier this year due to possible significant production increases.
But the Food Outlook report said that despite the fall in the Index, the cost of the typical food commodity basket globally today is still nearly 70 per cent higher than it was between 2002 and 2004.
“The 2008-2009 food prices boom spurred plantings and production of many crops, which has resulted in a recovery in inventories and boosting stocks-to-use rations, a tendency likely to prevail in 2010/11,” the publication said.
The global drop in prices, it cautioned, masks the ongoing high costs of food imports due mainly to higher expenditures on non-cereal products, including dairy products and vegetable oils.
The new report also predicted continued growth in cereals, with world production this year on target to match the record set in 2008.
3 June 2010 – International prices of key food staples dropped in the first five months of this year, driven largely by plummeting prices of cereals and sugar, according to a new United Nations Food and Agriculture Organization (FAO) report.
The FAO Food Price Index – the average of commodity prices, including meat and dairy – averaged 164 points in May, down from 174 in January and substantially less than its peak of 214 reached in the spring of 2008.
Sugar prices have plunged by half from their peak earlier this year due to possible significant production increases.
But the Food Outlook report said that despite the fall in the Index, the cost of the typical food commodity basket globally today is still nearly 70 per cent higher than it was between 2002 and 2004.
“The 2008-2009 food prices boom spurred plantings and production of many crops, which has resulted in a recovery in inventories and boosting stocks-to-use rations, a tendency likely to prevail in 2010/11,” the publication said.
The global drop in prices, it cautioned, masks the ongoing high costs of food imports due mainly to higher expenditures on non-cereal products, including dairy products and vegetable oils.
The new report also predicted continued growth in cereals, with world production this year on target to match the record set in 2008.
6/03/2010
Gulf farmland search switches to richer countries
Reuters | May 28, 2010
■ Gulf buyers looking for less risky farmland
■ Australia, East Europe in focus
■ Lower infrastructure costs for land in developed world
By Amena Bakr
DUBAI, May 28 (Reuters) – Gulf nations seeking farmland for food security have shifted their focus to East Europe and Australia after a buying spree in the developing world as they look for land that comes with less political and financial risk.
The Gulf is one of the world’s biggest food importing regions. It stepped up efforts to buy and lease farmland in developing nations to secure food supplies after global commodity prices rose to record levels in 2007-2008.
Gulf investors initially targeted Sudan, Iraq, Pakistan and Thailand, among others.
“If you have a look at the countries that have so far been targeted you’ll find that all of them have a degree of political risk,” said Sudhakar Tomar, managing director of Dubai-based Hakan Agro DMCC, one of the largest food trading companies in the Gulf region.
“But there are other options that are commercially attractive, ethically justifiable and legally more secure.”
Hassad Food, owned by Qatar’s sovereign wealth fund, formed a Sydney-based subsidiary in December, Hassad Australia, to buy farmland for wheat and livestock production.
It plans to have the capacity to produce 150,000 sheep and 50 tonnes of wheat per year, the company said.
Last year Pharos Miro Agriculture Fund, a joint venture between UAE-based Pharos Financial Group and Miro Holdings International, was launched and aims to develop farmland in eastern Europe.
The $350 million fund had attracted the attention of Gulf sovereign wealth funds, said Miro Chief Executive Oliver Barnes.
“We are looking for land across that area in countries like Romania, Bulgaria and Moldova,” he said.
Last month, UK-based Swire Group went to the Gulf in search of a buyer for their agricultural business in Australia, Clyde Agriculture.
“We came to the Gulf region because we noticed that there’s an interest in not only agriculture investment but also in locations that are more sustainable in the long term and are already developed,” said John McKillop, managing director of Clyde Agriculture.
The company owns 165,000 hectares of farmland in New South Wales, in eastern Australia, McKillop said.
While land in developed countries is more expensive, the cost of building infrastructure in developing countries can quickly make cheap land look pricey, analysts said.
“Many people think that land in Africa is cheap but it’s not because you have to invest in infrastructure which is not there so costs around $1,500-2,000 per hectare,” Barnes said.
In eastern Europe the company would be able to have freehold rights over the land which roughly costs around $2,000 per hectare, Barnes said.
AVOIDING CRITICISM
Foreign land acquisitions have provoked opposition from some sectors and from farmers in developing nations.
In Madagascar, an attempt by South Korea’s Daewoo Logistics to lease an area of land larger than Qatar to grow food for export contributed to the unpopularity of former leader Marc Ravalomanana, who was toppled in March last year.
The United Nations continues to express concern that farmers’ rights in developing nations could be compromised as rich countries buy farmland to secure food supplies.
This caused Gulf states to rethink rather than risk tarnishing their reputation with the deals, described by some who oppose them as land grabs.
“But as more investors look into the opportunities that developed nations present there will be no need to go underground or be ashamed of these deals,” said Hakan Agro’s Tomar.
Buying land in countries that can barely feed themselves and exporting produce from it has exposed investors to popular unrest and political disapproval in their target countries in the developing world.
Developed countries offered less political and ethical obstacles to shipping food out, Clyde Agriculture’s McKillop said.
“Investors can ship back all the produce without having to share it with the local market,” McKillop added.
Pakistan and Iraq are in the process of finalising laws that would govern long-term foreign land leases. Both countries have conditions where investors have to share a percentage of the produce with the local market.
“(Investors) goal is to produce food to ship in back to their countries, but our priority is to feed our own people. So, if any land leases take place, the majority of the produce will have to be for the local Iraqi market,” Fawzi al-Hariri, Iraq’s minister of industry and minerals, said.
Changes in legislation combined with political upheaval in target countries have made farmland in the developing world less of a magnet for Gulf cash.
“Investing in developing countries was attractive in the beginning, but we just came to a point where laws and govenments are changing overnight and it was just not a secure option,” said a UAE based investor who spoke on condition of anonymity. (Editing by William Hardy)
■ Gulf buyers looking for less risky farmland
■ Australia, East Europe in focus
■ Lower infrastructure costs for land in developed world
By Amena Bakr
DUBAI, May 28 (Reuters) – Gulf nations seeking farmland for food security have shifted their focus to East Europe and Australia after a buying spree in the developing world as they look for land that comes with less political and financial risk.
The Gulf is one of the world’s biggest food importing regions. It stepped up efforts to buy and lease farmland in developing nations to secure food supplies after global commodity prices rose to record levels in 2007-2008.
Gulf investors initially targeted Sudan, Iraq, Pakistan and Thailand, among others.
“If you have a look at the countries that have so far been targeted you’ll find that all of them have a degree of political risk,” said Sudhakar Tomar, managing director of Dubai-based Hakan Agro DMCC, one of the largest food trading companies in the Gulf region.
“But there are other options that are commercially attractive, ethically justifiable and legally more secure.”
Hassad Food, owned by Qatar’s sovereign wealth fund, formed a Sydney-based subsidiary in December, Hassad Australia, to buy farmland for wheat and livestock production.
It plans to have the capacity to produce 150,000 sheep and 50 tonnes of wheat per year, the company said.
Last year Pharos Miro Agriculture Fund, a joint venture between UAE-based Pharos Financial Group and Miro Holdings International, was launched and aims to develop farmland in eastern Europe.
The $350 million fund had attracted the attention of Gulf sovereign wealth funds, said Miro Chief Executive Oliver Barnes.
“We are looking for land across that area in countries like Romania, Bulgaria and Moldova,” he said.
Last month, UK-based Swire Group went to the Gulf in search of a buyer for their agricultural business in Australia, Clyde Agriculture.
“We came to the Gulf region because we noticed that there’s an interest in not only agriculture investment but also in locations that are more sustainable in the long term and are already developed,” said John McKillop, managing director of Clyde Agriculture.
The company owns 165,000 hectares of farmland in New South Wales, in eastern Australia, McKillop said.
While land in developed countries is more expensive, the cost of building infrastructure in developing countries can quickly make cheap land look pricey, analysts said.
“Many people think that land in Africa is cheap but it’s not because you have to invest in infrastructure which is not there so costs around $1,500-2,000 per hectare,” Barnes said.
In eastern Europe the company would be able to have freehold rights over the land which roughly costs around $2,000 per hectare, Barnes said.
AVOIDING CRITICISM
Foreign land acquisitions have provoked opposition from some sectors and from farmers in developing nations.
In Madagascar, an attempt by South Korea’s Daewoo Logistics to lease an area of land larger than Qatar to grow food for export contributed to the unpopularity of former leader Marc Ravalomanana, who was toppled in March last year.
The United Nations continues to express concern that farmers’ rights in developing nations could be compromised as rich countries buy farmland to secure food supplies.
This caused Gulf states to rethink rather than risk tarnishing their reputation with the deals, described by some who oppose them as land grabs.
“But as more investors look into the opportunities that developed nations present there will be no need to go underground or be ashamed of these deals,” said Hakan Agro’s Tomar.
Buying land in countries that can barely feed themselves and exporting produce from it has exposed investors to popular unrest and political disapproval in their target countries in the developing world.
Developed countries offered less political and ethical obstacles to shipping food out, Clyde Agriculture’s McKillop said.
“Investors can ship back all the produce without having to share it with the local market,” McKillop added.
Pakistan and Iraq are in the process of finalising laws that would govern long-term foreign land leases. Both countries have conditions where investors have to share a percentage of the produce with the local market.
“(Investors) goal is to produce food to ship in back to their countries, but our priority is to feed our own people. So, if any land leases take place, the majority of the produce will have to be for the local Iraqi market,” Fawzi al-Hariri, Iraq’s minister of industry and minerals, said.
Changes in legislation combined with political upheaval in target countries have made farmland in the developing world less of a magnet for Gulf cash.
“Investing in developing countries was attractive in the beginning, but we just came to a point where laws and govenments are changing overnight and it was just not a secure option,” said a UAE based investor who spoke on condition of anonymity. (Editing by William Hardy)
6/02/2010
France sets up $120 million Africa agriculture fund
Reuters | 2 June 2010
France will set up a $120 million fund to help Africa’s farming and food distribution sectors, a communique from the 25th Africa-France Summit said on Tuesday, as the continent looks to ensure security of food supplies.
African agriculture faces multiple constraints, ranging from poor rural infrastructure, to lack of access, sufficient water, fertilisers, and machinery.
To ensure sustainable food production and achieve food security, the agricultural sector needs to attain significant growth rates over the next four decades.
“France has announced the establishment of an investor fund … destined to support the development of farming projects in Africa and the distribution of food stuffs,” the communique said.
In 2008, Africa produced 152.3 million tonnes of cereals, 12 percent more than the previous year, while projections for 2009 indicate that the continent’s cereal production could have reached 160 million tonnes, according to the United Nation’s Food and Agriculture Organisation. Sub-Saharan Africa has around 395 million hectares of unused farmland.
The fund will start at $120 million and could increase to as much as $300 million. The communique did not specify where or how the fund would operate.
President Nicolas Sarkozy and African leaders, including South Africa’s Jacob Zuma and Nigeria’s Goodluck Jonathan, also agreed to work together towards creating a framework to fight volatility of commodity prices and to reinforce food security, when France takes the helm of the G8/G20 group of large economies in 2011.
In sub-Saharan Africa, since 2009, over 265 million people are malnourished and 30 percent of the population suffers from hunger, FAO’s Director-General, Jacques Diouf, has said.
The Africa-France Summit, which closed on Tuesday, has been held since 1975. France is looking to claw back some of its historical economic influence in the continent, given the emergence of new rivals such as China, which has become Africa’s biggest trade partner.
France welcomed about 40 African leaders in the French Riviera city of Nice to discuss issues ranging from Africa’s political position globally to the environment and security.
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