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The Challenge Fund Overview

The AgriFI Kenya Challenge Fund is an € 18,000,000 initiative   that supports productive and market-integrated smallholder agriculture through the provision of financial support to agri-enterprises. Funded by the EU, and co-funded by Slovak Aid, the fund is managed by Self Help Africa.

The aim is to contribute to improvements in the capacity of smallholder farmers/pastoralists to practice environmentally sustainable and climate-smart agriculture as a business in inclusive value chains. The programme is being implemented in parallel with a planned EIB facility provided to local banks. Self Help Africa and Imani Development Limited are the Fund Managers for the programme.

The Challenge Fund is part of the wider AgriFI programme in a financing agreement between the European Commission and the Government of Kenya under the 11th EDF signed in 2017 to unlock, accelerate and leverage investments within value chains.

The Challenge Fund Objective

The funds specific objective is to integrate 100,000 smallholder farmers/pastoralists in sustainable value chains. By supporting and enabling at least 50 agri-enterprises to increase their turnover (by at least 25%), this will in turn increase incomes and food security for at least 100,000 smallholders/pastoralists and create a minimum of 10,000 jobs.

The financial support will require match funding from the agri-enterprise making the application. The match funding may be through own resources available to the agri-enterprise or may be sourced through external finance such as credit or external equity investment. Match funding can also come from co-applicants.

In line with AgriFI Kenya Challenge Fund objectives, as well as recent field studies, agri-enterprises will be considered for funding based on a set of weighted criteria including its potential for positive impact on smallholder farmers. The specific areas for assessment include:

Economic Drivers/Viability:

This assessment area looks at business revenue growth and market potential. In addition, the business capacity is assessed in terms of governance, financial and risk management.

Environmental impact:

to include climate smart approaches both at farm and agric-enterprise level. 

Social impact:

how will the applicant include smallholder farmers and pastoralists and increase their incomes, create employment opportunities. Other social issues assessed include food security and improved nutrition as well as inclusion of gender and youth in the proposed project. Creation of opportunities in Arid and Semi-Arid counties.

Application Process

The Challenge Fund will run over three open calls, with a total time for the overall project at approximately 60 months. Each call will have the same operational structure, however with possible variations in criteria, number of projects etc. based on learnings from earlier calls and to ensure the project meets its overall objectives. Each call will be defined by a specific set of guidelines that will be endorsed by the Programme Steering Committee. The selection process will last 6 months from start to finish, with a 24-36 months for implementation, making each call approximately 36 monthson average.

The first call for proposals targets to award Euro 6 million to 15 projects in total at an average of Euro 375,000 per project.

The window for applications for the first call for proposals opened on 24th October 2018 and will be open for 30 days.

  • Download call guidelines and questions from the AgriFI Kenya Challenge Fund website
  • Register and start application in AfriCUBE
  • Fill all required details on the application form
  • Submit project concept note on AfriCUBE

 

Benefits and Awards

The AgriFI Kenya Challenge Fund is looking to award an indicative amount of EUR 18,000,000 to agri-enterprises as financial support.

Any financial support requested from AgriFI Kenya Challenge Fund must fall within the following range:

  • Minimum amount: Euro 200,000
  • Maximum amount: Euro 1,000,000

The Challenge Fund will award financial support to cover a maximum of 50% of the total value of the proposal. The balance (i.e. the difference between the total cost of the proposal and the amount requested as financial support) must be financed from matching funds in the form of cash/cash equivalents, credit or equity from external financiers. In cases where applications are made by consortia the match fund contributions can be provided by any of the consortia members.

Eligibility

  • Must be duly incorporated in Kenya as a company or a cooperative.
  • Must be compliant with all national and local laws and regulations including but not limited to tax regulation, health and safety and environmental standards.
  • Must be a for-profit entity; not-for-profit organisations and government bodies are not eligible to apply as lead applicants. However, they can contribute to projects as co-applicants.
  • Must be willing and able to at least match the sum of financial support requested to fund the activities of the proposal through a blend of cash and cash equivalents, credit or equity from own or third-party sources.
  • Must provide evidence in the project proposal of current or future integration of smallholder farmers/pastoralists in existing or new value chain(s) in the project’s areas.
  • The business must have at least three (3) years of uninterrupted operations with a focus on any or a combination of the thematic areas of the AgriFI Kenya Challenge Fund programme.
  • Must have a yearly turnover in the range of EUR 200,000 to EUR 50,000,000.
  • Must have an asset base of less than EUR 43,000,000.
  • Must have audited accounts for the two (2) most recent years. The audited accounts should have been prepared in accordance with International Financial Reporting Standards (IFRS) by an accountant accredited by the Institute of Certified Public Accountants of Kenya (ICPAK).

Applicants may submit their business plans in consortium with other companies: in this case, the above criteria will apply only to the lead applicant.

For more information, visit the official website of the AgriFI Kenya Challenge Fund for agricultural business