Neven Mimica, European Commissioner for International Cooperation and Development, is pictured at the ABC Fund launch with Paulette Lenert, Minister for Development Cooperation and Humanitarian Action of Luxembourg
Photo: European Union
Luxembourg has contributed €5m to an international fund for agricultural entrepreneurship (ABC Fund) aimed at stimulating economic and social development in rural areas.
It was the first country to contribute to the ABC Fund, which it developed with the International Fund for Agricultural Development (Ifad).
The government explained in a press release on Monday that, particularly in African countries, the fund addressed the gap between population growth and agricultural production growth, the lack of employment opportunities for young people and the difficulty of accessing credit for rural and agricultural MSMEs, which are “too large to benefit from microcredits but too small to provide sufficient guarantees for the "traditional" banking system”. The fund would also serve as one step in achieving the UN Sustainable Development Goals and 2030 Agenda for Sustainable Development.
The news was announced by Luxembourg cooperation and humanitarian action minister Paulette Lenert during the Ifad board of governors meeting in Rome from 14-15 February.
Based in Luxembourg, the ABC Fund will be managed by Luxembourg-based fund manager Bamboo Capital Partners.
At the first closing, the European Commission committed €40m, the Alliance for a Green Revolution in Africa (Agra) €4.5m and Luxembourg €5 million in the initial tranche of the fund, the idea of which is to serve as a leverage to mobilise private investment. Within 10 years, the fund is expected to have €200 million in capital invested, including by the private sector, reaching more than 700,000 households in developing countries.