A US$50m fund for innovative business ideas has been launched in Accra on 12/06. The fund, Africa Enterprise Challenge Fund (AECF), is a private sector fund, backed by some of the biggest names in development finance and hosted by the Alliance for a Green Revolution in Africa (AGRA). The African Development Bank (ADB), the Consultative Group to Assist the Poor (CGAP), the UK Department for International Development (DFID), the International Fund for Agricultural Development (IFAD), and the Netherlands Ministry of Foreign Affairs (NMFA) were the initial funders of the AECF.
Chief Executive Officer of AECF, Hugh Scott
The business ideas AECF is expected to consider include agri-business, rural financial services and rural media information and other services. The fund will run two competitions per year for 6 years starting in mid-2008. The AECF has an agreed sum of money (currently US$7.5m) available (in the form of grants and non-recourse loans) for each round of its competition for which private companies are invited to submit proposals for funding. It will focus initially on 13 countries (Kenya, Uganda, Tanzania, Rwanda, Burundi, Ghana, Nigeria, Mali, Burkina Faso, South Africa, Mozambique, Malawi and Zambia) operating from three regional hubs (Nairobi, Accra and Johannesburg).
The AECF, will provide grants or non-recourse loans up to a maximum of US$1.5m per company (the average grant/loan size will be US$750,000) to the most innovative proposals that are adjudged to have the greatest impact on the largest number of rural poor people.
- It focuses exclusively on supporting the private sector
- It provides an open and transparent “competition” for donor funds
- It is based in, and run from, Africa.
- It is focused on funding practical projects that are both commercially viable and will have a broad developmental impact on the rural poor
- It is structured and governed along private sector principles with strong and sustained business engagement to ensure a flexible, responsive, results-orientated approach that the private sector can understand
- It leverages private sector and donor money to help fund successful projects and enterprises
- It is able to support cross-border, regional and pan-continental projects, as well as national ones.
In Ghana, the fund is managed by KPMG Development Services Limited. The AECF is an AGRA initiative that supports AGRA’s mission. A successful applicant is expected to contribute a minimum of 50 percent of the total cost of the project. The deadline for application is June 30, this year, while funding approval for successful applications will be granted within a maximum of 90 days from the closing date for applications.
Modern Africa 13/06 $50m Cash For Private Sector