13 June 2012
LONDON/JEDDAH - The Islamic Development Bank (IDB) is partnering with Dutch asset manager Robeco to launch a $600 million food and agriculture fund to invest in projects that promote steady food supply. The Saudi-based fund will make private equity investments in food and agriculture projects as well as companies across various target countries in a Shariah-compliant way. It will be run by a joint venture between the Islamic Corporation for the Development of the Private Sector (ICD), a unit of the IDB, and Robeco, a subsidiary of Dutch bank Rabobank.
"The fund is the first public private partnership of this nature and size to address the inefficiencies and wastage facing the food and agricultural sector throughout our member countries," Khalid Al-Aboodi, ICD chief executive said in a statement. "Boosting regional food production, supply and trade, the fund's investments will also lead to creation of jobs, transfer of technology, promotion of sustainable practices and poverty alleviation," Al-Aboodi said. The fund hopes to raise an initial $350 million by the end of the year to begin operations, targeting institutional investors as well as governmental and multilateral organizations and will have a 10-year term.
Saudi Minister for Agriculture Fahd Bin Abdulrahman Balghunaim said earlier that the government during the food price spikes of 2007-8 positioned itself as a facilitator for the Saudi private sector seeking land and agricultural investments overseas, providing funds, credit and logistics, establishing government relations, signing agreements and conducting investigations into water resources, quality of land, availability of labor, facility of FDI and transparency, which it then avails to its domestic companies. The investment is a private sector decision, Balghunaim said, and the private sector "should study the investment without influence of the government. This is the general concept". The government has also created a state-owned company with capital of $800 million whose objective is to study private sector proposals and, where appropriate, to join capital or sign agreements for off-take to provide buyer guarantees, stimulating investment.
Saudi investors identified around 30 destination countries worldwide - from Kazakhstan and Turkey to the Philippines and Vietnam. In May 2009, the first batch of rice grown in Ethiopia was del, where Saudi investors spent $100 million to grow wheat, barley and rice on land leased to them by the Ethiopian government. The investment is a private sector decision, Dr Balghunaim explains, and the private sector "should study the investment without influence of the government.
This is the general concept". The government has also created a state-owned company with capital of $800 million whose objective is to study private sector proposals and, where appropriate, to join capital or sign agreements for off-take to provide buyer guarantees, stimulating investment. The Saudi strategy, as with other oil-rich states, was enabled by the availability of major official reserves. Saudi investors identified around 30 destination countries worldwide - from Kazakhstan and Turkey to the Philippines and Vietnam. But Africa - a short ride over the Gulf of Aden - is arguably the most attractive. In May 2009, the Saudi King headed a ceremony to receive the first batch of rice grown in Ethiopia, where Saudi investors spent $100 million to grow wheat, barley and rice on land leased to them by the Ethiopian government.
LONDON/JEDDAH - The Islamic Development Bank (IDB) is partnering with Dutch asset manager Robeco to launch a $600 million food and agriculture fund to invest in projects that promote steady food supply. The Saudi-based fund will make private equity investments in food and agriculture projects as well as companies across various target countries in a Shariah-compliant way. It will be run by a joint venture between the Islamic Corporation for the Development of the Private Sector (ICD), a unit of the IDB, and Robeco, a subsidiary of Dutch bank Rabobank.
"The fund is the first public private partnership of this nature and size to address the inefficiencies and wastage facing the food and agricultural sector throughout our member countries," Khalid Al-Aboodi, ICD chief executive said in a statement. "Boosting regional food production, supply and trade, the fund's investments will also lead to creation of jobs, transfer of technology, promotion of sustainable practices and poverty alleviation," Al-Aboodi said. The fund hopes to raise an initial $350 million by the end of the year to begin operations, targeting institutional investors as well as governmental and multilateral organizations and will have a 10-year term.
Saudi Minister for Agriculture Fahd Bin Abdulrahman Balghunaim said earlier that the government during the food price spikes of 2007-8 positioned itself as a facilitator for the Saudi private sector seeking land and agricultural investments overseas, providing funds, credit and logistics, establishing government relations, signing agreements and conducting investigations into water resources, quality of land, availability of labor, facility of FDI and transparency, which it then avails to its domestic companies. The investment is a private sector decision, Balghunaim said, and the private sector "should study the investment without influence of the government. This is the general concept". The government has also created a state-owned company with capital of $800 million whose objective is to study private sector proposals and, where appropriate, to join capital or sign agreements for off-take to provide buyer guarantees, stimulating investment.
Saudi investors identified around 30 destination countries worldwide - from Kazakhstan and Turkey to the Philippines and Vietnam. In May 2009, the first batch of rice grown in Ethiopia was del, where Saudi investors spent $100 million to grow wheat, barley and rice on land leased to them by the Ethiopian government. The investment is a private sector decision, Dr Balghunaim explains, and the private sector "should study the investment without influence of the government.
This is the general concept". The government has also created a state-owned company with capital of $800 million whose objective is to study private sector proposals and, where appropriate, to join capital or sign agreements for off-take to provide buyer guarantees, stimulating investment. The Saudi strategy, as with other oil-rich states, was enabled by the availability of major official reserves. Saudi investors identified around 30 destination countries worldwide - from Kazakhstan and Turkey to the Philippines and Vietnam. But Africa - a short ride over the Gulf of Aden - is arguably the most attractive. In May 2009, the Saudi King headed a ceremony to receive the first batch of rice grown in Ethiopia, where Saudi investors spent $100 million to grow wheat, barley and rice on land leased to them by the Ethiopian government.
© The Saudi Gazette 2012
