Washington D.C., February 12, 2009
—IFC, a member of the World Bank Group, is providing $75 million, its largest equity investment in agribusiness, to help set up a fund that will support farming and food production in emerging markets to increase the global food supply.
IFC has teamed up with Altima Partners LLP, which manages the $625 million Altima One World Agriculture Fund, to create a parallel vehicle that specifically targets emerging markets. The new fund, Altima One World Agriculture Development Fund, will invest in agricultural production land and world-class farm operators that will help increase economies of scale and improve farm productivity by implementing modern technology and best practices.
“Altima is honored to have been selected as a strategic partner by IFC,” said Joseph Carvin, partner with Altima Partners LLP. “We are confident that our combined strengths will be a force for positive change in the agriculture sector and will benefit communities around the world.” Carvin also noted that food security issues and the need to cultivate more land emphasize the importance of promoting best management practices for the agricultural sector.
High food prices and their impact on the poor continue to be a top concern for IFC and the World Bank. Although prices for soft commodities have been declining recently, they remain above historical highs and could likely rise again in today’s volatile global economic climate. The financial crisis has negatively affected the availability of financing and has increased the cost of credit. A combination of declining soft commodity prices and increasing cost of credit creates lower incentives for farmers to plant, which could result in global production shortages.
IFC’s response focuses on increasing food production by investing in productive farm land in countries with high potential for agriculture and improving productivity. By investing in the Altima fund, IFC is leveraging its resources to stimulate growth in agricultural production in emerging markets.
“Increasing agricultural productivity in a sustainable way is central to expanding global food production,” said Oscar Chemerinski, IFC Director for Global Agribusiness. “Agribusiness private equity funds investing in farmland are just emerging as an asset class. We are glad to work with Altima Partners in creating new opportunities for emerging markets to expand their food production.”
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit
www.ifc.org
.
