Value Chain Innovation Fund

Value Chain Innovation Fund: The VCIF will provide targeted investment incentives to “first mover" private investors (farmers, agricultural co-operatives, MSMEs, agribusinesses) along the selected value chains who invest in new production technologies, business models or other services/functions needed in the value chain. The objective is to encourage potential adopters of new technologies or business models with unknown risks and economic benefits to actually adopt these and test their validity; this experience, as properly documented and analysed, will facilitate their wider adoption and scaling-up without government subsidy and help create turnover, income, tax revenues and employment. A matching grant of up to 20% will be provided as incentive.

Line of Credit: $9m worth of line of credit will be provided to RDB under the supervision of MEF for on-lending. As with the matching grant investment incentives, loans provided through this credit line will be targeted towards investments that address specific bottlenecks in the VC identified via the MSP but for which banks and MFI are not yet ready or willing to provide commercial credit. Typical investments expected to be partially financed by the line of credit include: (a) more complex innovative business models in the value chains, for example joint venture partnerships between lead firms and farmer groups; (b) businesses investing in innovative technologies not previous seen in the country, e.g. mobile cyclone grain dryers; or (c) longer term smallholder investments at the farm level for which MFI do not have matching sources of term finance.

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