Rabobank Group, along with three other international finance institutions, have decided to enter the agriculture business in India by setting up a private equity fund focused on the country?s agri-business.
The $100 million fund aims to boost the growth of India?s agri-business sector by making value-added private equity investments with focus on small and medium enterprises and companies in rural areas, the company said in a statement on Friday.
The other three agencies involved in the equity fund are International Finance Corporation, Netherlands-based Finance for Development and Germany-based bank DEG.
Rabobank, which conceptualised and sponsored the fund, will provide 25% of the committed capital.
IFC ? a member of the World Bank Group, FMO, and DEG will invest $20 million each, with the balance to be tied up with private investors. The fund will invest in companies operating in the more than 38 sub-sectors of food and agri-business as well as in agri infrastructure such as cold chain logistics and warehousing.
Bert Heemskerk, chairman of the executive board of Rabobank Group, said, ?Agri-business in India has enormous potential but access to finance and technical knowledge will be critical to meet the needs of the sector as it grows. As a global leader in the food and agriculture business, Rabobank is committed to lending its knowledge and experience to the development of this sector in India. We are pleased to sponsor this first of its kind private equity fund in India and welcome the support of highly reputed investors like IFC, FMO and DEG.?
Lars Thunell, IFC?s executive vice president and CEO, commented that, ?Agri-business is a key priority for IFC in India and globally. Investments to modernise and develop food and agriculture businesses are urgently needed and will have a direct impact on reducing poverty. We are pleased to support this innovative fund that will boost the development of businesses in this important sector.?
Arthur Arnold, CEO of Dutch development bank FMO, said, ?FMO has been active in India in a large number of sectors. Providing investment through private equity fund is the most effective way to extend financial support to the fast emerging agribusiness sector.?