Analysis of possible financial partners to the project on land-related investments

In addition to support to national governments institutional capacity building and the role of watch-dogs, such as civil society and independent media, Sida has decided to explore possibilities to collaborate around land related investments as part of the Business for Development-programme. A decision to start a project on land related investments was taken July 2011 and a number of activities have been implemented as part of the project.

The phenomenon of Land related investments or Agro based investments involves a number of different actors, such as the local community, the private sector, central and local governments, civil society, researchers, media, funding agencies and development partners. Each actor has its own perspective, and Sida believes that the objective of increasing the leverage for people in poverty of land related investments, increases if a constructive collaboration between the actors is achieved.

Accessing solid financing is fundamental to any investment, including land related investments. The role of financing institutions is therefore crucial. Part of the investment processes is normally a thorough Due Diligence (DD) analysis, including topics related to financial, social and ecological sustainability. Sida does neither have the mandate, nor the competence to invest in equity. Instead of Sida building up in-depth knowledge on DD, and thereby identify ‘good’ investments, an alternative approach could be to collaborate with DFIs or other relevant funding institutions that share the same objective. This would not only save resources, but also share the risk related to this type of investments. In spite of a possible collaboration, Sida would have to analyse if there are gaps in the DD-process seen from Sida’s perspective, i.e. are there areas of importance to Sida, not covered in a normal DD-process.

There is however a number of different DFIs and so called Impact Investors dealing with land related investments. A possible collaboration has to be based on a number of aspects, see below under ‘tasks’. Sida has therefore decided to carry out a study to facilitate the establishment of strategic partnerships with funding institutions.

The term ‘strategic partnership’ in this context refers to actors that a collaboration with, can increase Sida’s goal fulfilment of increasing the leverage for people in poverty of a land related investments.

The Objective of this assignment was to identify 2-3 strategic partners that focus on funding land related/agro based investments in Africa.