UK-based CDC commits $30 mn into Rabo's new food & agri fund

The fund will invest in growing businesses across the agri-business industry

CDC, the British governments’s development finance institution, has committed $30 million to Rabo Equity’s India Agri Business Fund 2 (IABF 2). The fund will be invested in growing businesses across the agri-business industry, such as agricultural input, food processing, rural retail and cold chain storage, and distribution companies.

With CDC as an anchor investor alongside Rabobank, IABF 2 aims to raise up to $200 million. Rabo will invest in 12 and 15 small and medium-sized companies with equity investment sizes ranging from $5-$30 million. Its first fund, India Agri Business Fund 1, launched in 2009, made 10 investments in companies, including Super Agri Seeds, Prabhat Dairy and NCML.

With an estimated total food consumption of $250 billion for 2013, India is the third largest consumer of food in the world and continues to witness significant increases in consumption, with a doubling of overall consumption expected by 2030. However, there are serious concerns over the levels of supply required to match this demand.

Alagappan Murugappan, CDC’s Managing Director, Asia Funds said: “Agribusiness is a key sector for CDC, in India and globally because of its job creating potential. Investments to modernise and develop food and agriculture businesses are urgently needed and will have a direct impact on reducing poverty."