The Danish Investment Fund for Developing Countries (IFU) and the European Union (EU) were today onboarded as new shareholders of aBi Finance Ltd. This a culmination of a Shareholders Agreement signed between the Royal Danish Embassy, the European Union and the IFU to allow new investments into aBi Finance, marking the reorganization of aBi Finance as a business entity.
The EU is investing 8.7M USD in aBi Finance, together with the IFU who tops this up by 9M USD. These investments will allow aBi Finance Ltd. to transition from a company limited by guarantee to a company limited by shares, to commercialise its operations, attract more investors and create wider impact overall. The combined investments from the IFU and EU, totaling approximately 18M USD, will enable aBi Finance Ltd to further support the growth of agribusinesses and improvement of the livelihood of beneficiary smallholder farmers through creation of new jobs and boosting incomes. It is expected that it will benefit 27,000 new beneficiary clients and create UGX 14.5 billion of additional income and 900 additional jobs annually.
Further, the capital increase will make aBi Finance Ltd future-ready, optimize its operations and continue to support businesses to thrive post COVID-19 pandemic. It will also maximize returns to its shareholders as well as increase access to finance for green enterprises and investments through aBi’s Green Challenge Fund.
The Danish Ambassador to Uganda, H. E. Nicolaj A. Hejberg Petersen, noted that: “With more than 12 years of involvement in aBi Finance we’re pleased that the institution is now mature for a greater commercialization. This will make aBi Finance much more sustainable. The new investments from IFU and EU will ensure aBi Finance’s continued support towards smallholder producers and businesses in the agribusiness sector in Uganda. An engagement that has been and still is of great importance to the work of the Danish Embassy in Uganda”.
The investment in aBi Finance holds a promising potential for increasing financial services to rural small farmers, giving more an option to grow their business and improve livelihood. But to create a solid business case for IFU to invest in, we needed concessional financing, which we have secured by co-investing with the European Union’s Blended Finance Facilities, said Mr. Anders Frigaard, Senior Investment Manager at IFU.
“The EU is delighted to join hands with the Danish Investment Fund for Developing Countries (IFU) to de-risk their investment in the Agricultural Business Initiative (aBi) in a true Team Europe approach. We are convinced that through this additional injection of capital, aBi will be able to reach more smallholder farmers in Uganda with better products, adapted to their needs. Access to finance will have a positive impact on their small businesses and pull many out of poverty” said European Union Head of Co-operation, Ms. Caroline Adriaensen.
“With the acquisition of new investments, aBi Finance has demonstrated that it is a sustainable and professionally run organization that can and will continue to attract foreign direct investment. We are confident that this investment will add to our past and ongoing initiatives to develop a competitive, profitable and sustainable agribusiness sector in Uganda” said Ms. Mona Muguma-Ssebuliba, aBi CEO.
