Eligible Investments and Investment Instruments
The AATIF focuses on investments into the agricultural sector. It targets small, medium and large scale agricultural farms as well as agricultural businesses along the entire agricultural value chain which will be financed directly or indirectly. Direct Investments comprise among others cooperatives, commercial farms, processing companies while Indirect Investments relate to investments into local financial institutions or other intermediaries (such as large agribusinesses) which on-lend to the agricultural sector, to fund e.g. smallholders or small and medium enterprises.
In pursuing its investment strategy, the Investment Manager will strive to continuously cooperate with established input providers and off-takers already involved in the agricultural value chain as well as with risk insurers to enhance the viability of the investment.
To be eligible for AATIF financing the investments should meet the following criteria
- The principal balance of the AATIF loan should be higher than USD5m (can be USD 3.5mn if business model shows clear growth potential in the short / medium term)
- The equity to total assets ratio post the AATIF investment is greater than ~30%
- The investee has exceeded the planning stage and is already operational
- The investee has an experienced management team on the ground
- The investee is either already profitable (min. EBITDA positive) or has a very strong sponsor / shareholder backing it
For eligible investees AATIF would be able to offer the following financing products
|Intermediary Investment Companies||Direct Investment Companies||Financial Institutions|
|Instrument||Senior Debt / Mezzanine / Guarantees / Risk Sharing||Senior Debt / Mezzanine||Senior Debt / Co-financing / Risk Sharing / Warehouse Financing|
|Transaction size||USD 5 – 30mn*||USD 5 – 15mn*||USD 5-30mn**|
|Tenor||Up to 12 years (average is 5-8 yrs.)||Up to 12 years (average is 5-8 yrs.)||Up to 10 years (average is 3-5 yrs.)|
|Interest rate||Market based||Market based||Market based|
*USD 3.5m is also possible if there is clear visibility that the company will grow and require further debt in the next 1-2 years.
**For FIs the AATIF loan should not exceed10% of the total assets or 20% of the total capital