PRESS RELEASE, 29 September 2015

The Africa Enterprise Challenge Fund Seven years, seven million people

What’s new? The AECF 2014 Impact Report. For the first time the AECF has published a report which presents how its portfolio of 160+ projects across Africa is having a significant impact on the lives of rural poor people by addressing some of the continent’s most urgent development challenges.

Why’s it important? The numbers are big! In 2014, the AECF portfolio reached an estimated 1.39m households – equivalent to seven million people. In 2014 alone, the AECF’s funded projects generated the equivalent of $117m of benefit for poor households. Some other key achievements include helping to create over 5,000 jobs in supported businesses, and providing improved access to clean, sustainable energy for over 200,000 families.

Why’s it interesting? Not just because the numbers are big, but also because of how the AECF achieves such an impressive impact. The AECF is a particular kind of fund: a $244m challenge fund which runs competitions that businesses enter in order to win grant and loan funding. Applicant businesses submit business ideas which are judged on their commercial viability, level of innovation, and potential for development impact. Successful applicants are awarded up to $1.5m of funding. Those with innovative business ideas should take note: new competitions are launched regularly! The AECF is unusual because it leverages private sector investment by sharing the financial risk of undertaking new and innovative business projects with development impact potential. By doing this the AECF plays a key role in driving the growth of sub-Saharan Africa’s agricultural, agribusiness and renewable energy sectors in ways which generate sustainable benefits for rural poor people.

What bit of the report should I read if I’m a… …business? The report contains insights into some of Africa’s key development challenges – such as energy access and climate resilience, and private sector development in fragile and conflict affected states – and how AECF funded businesses are addressing these challenges. …donor or development practitioner? In addition to analysing the impact of the AECF portfolio, the AECF team reflects on the 10 things they’ve learned in running an enterprise challenge fund. …impact investor? The AECF’s Connect facility supports funded projects raise additional capital from third parties to expand their businesses. This section gives the Connect team’s view on how the impact investing market is changing as it matures.

Who is saying what? Hugh Scott, AECF Director: ‘It’s an exciting time for the AECF because we’re now able to look back and see where we’ve had the most impact both in terms of numbers of households benefiting and benefits per household – some projects deliver more of the former and some more of the latter. We are learning about what works and what doesn’t in so many areas. We have some great projects that are demonstrating that sharing risk with the private sector in this way works well, generates benefits for the rural poor and is “good development”.’ AECF grantee, AgriProtein Technologies: ‘Thank you for the catalyst that made our adventurous plans possible. With the news we had won US$1m of loan funding and the immediate cash injection of the US$150,000 grant we were able to go to market with demonstrable investment already on board. On the back of AECF’s commitments we were able to raise a further ten million dollars of funding. Our first factory is on the verge of go-live, a place almost impossible to have imagined three years ago when we sat waiting to deliver our funding pitch to your team in Nairobi.’

Notes for editors

The African Enterprise Challenge Fund (AECF)

The Africa Enterprise Challenge Fund (AECF) is a multi-donor funded financing vehicle which works to stimulate private sector entrepreneurs in Africa to find innovative and profitable ways of improving market access, and the way markets function, for the rural poor. The Fund awards grants and loans to projects focused on agriculture, renewable energy and adaptation to climate change, and access to financial services and information, with the aim of improving household incomes and reducing rural poverty. www.aecfafrica.org

Alliance for a Green Revolution in Africa (AGRA)

The AECF is a special partnership initiative of the Alliance for a Green Revolution in Africa (AGRA). AGRA is a dynamic, African-led partnership working across the African continent to help millions of small-scale farmers and their families lift themselves out of poverty and hunger. Through its programmes, AGRA develops practical solutions to significantly boost farm productivity and incomes for the poor while safeguarding the environment. AGRA, with initial support from the Rockefeller Foundation and the Bill & Melinda Gates Foundation, maintains offices in Nairobi, Kenya and Accra, Ghana. www.agra.org

KPMG International Development Advisory Services

KPMG IDAS is the Fund Manager for the AECF. KPMG IDAS is a Centre of Excellence in development advisory work on the continent. It has adopted a pan-African approach to development, employing full-time development experts complemented by a network of champions across the continent to deliver services in programme and fund management, organisational assessment and development, rebuilding fragile and conflict affected states, renewable energy and adaptation to climate change, private sector development, good governance and public healthcare.