Africa Enterprise Challenge Fund

WHAT IS THE AECF?
The Africa Enterprise Challenge Fund (AECF) is a US$190m private sector fund, backed by some of the biggest names in development finance and hosted by the Alliance for a Green Revolution in Africa (AGRA). Our aim is to encourage private sector companies to compete for investment support for their new and innovative business ideas.

WHERE DOES THE AECF WORK?
The AECF is open to proposals from all countries in Africa. Multi-country and regional projects are also eligible. We operate from three regional hubs (Nairobi, Accra and Johannesburg).

WHAT IS THE RELATIONSHIP BETWEEN AGRA AND THE AECF?
AGRA is an alliance jointly created in 2006 by The Rockefeller Foundation and the Bill & Melinda Gates Foundation aimed at improving agricultural productivity and small holder farmer well-being throughout sub-Saharan Africa. AGRA is registered as a non-profit entity in the United States, but operates out of Nairobi, Kenya, where it is registered as the branch of a foreign corporate entity. From Kenya, AGRA is managing programs supporting agricultural development across sub-Saharan Africa. The AECF is a special partnership initiative of AGRA that supports AGRA’s mission. The Board of AGRA provides the governance structure for the AECF and is responsible to the AECF’s donors. However, in practice, the AECF operates as an independent fund reporting to its own Investment Committee which in turn reports to a Governing Council made up of its donor funders and ultimately AGRA’s Board.

WHO FUNDS THE AECF?
The Australian Government Aid Program, Danish International Development Agency (DANIDA), the UK Department for International Development (DFID), the International Fund for Agricultural Development (IFAD), the Netherlands Ministry of Foreign Affairs (NMFA), and the Swedish International Development CooperationAgency (Sida) are the current funders of the AECF. Others may join in due course.

WHAT IS THE GOVERNANCE STRUCTURE OF THE AECF?
The AECF is not registered as a legal entity. The AECF was established as a special partnership initiative of the Alliance for a Green Revolution in Africa (AGRA) which hosts the AECF and provides strategic, administrative and logistical support as well as the legal entity for contracting purposes on behalf of the AECF. The governance and oversight of the AECF is provided by a mixture of AGRA and AECF structures as follows:

1. The Board of AGRA.
The Board of AGRA (chaired by Kofi Annan) is the body with ultimate fiduciary responsibility and accountability for the AECF’s performance. The AECF reports to the AGRA Board on an annual basis. The AGRA Board delegates the oversight and governance of the AECF to a Governing Council (Chaired by AGRA).

2. The Governing Council of the AECF (GC).
The Governing Council, consisting of representatives of the donors and AGRA, is the highest decision-making body of the Fund (but subject to the AGRA Board). The Governing Council is chaired by the President of AGRA and meets normally every six months. The Executive Manager of AGRA is secretary to the Governing Council. The Fund Manager of the AECF is charged with reporting to the GC on a six-monthly basis. For certain competitions or windows, the IC delegates its authority to an Investment Sub-Committee (ISC), co-opting additional members with relevant specialist skills.

3. The Investment Committee (IC).
The Investment Committee, consisting of AGRA staff and independent persons appointed by the GC, is charged with the responsibility to review and decide which of the projects recommended by the Fund Manager should be funded by the AECF. The Fund Manager is secretary to the Investment Committee. On a normal basis the IC will meet four times per year. The Fund Manager reports to the IC on a quarterly basis.
The AECF’s permanent staff consists of an Executive Manager and Fund Manager, with their respective teams.

4. Executive Manager (EM) – Andre Dellevoet.
The EM is based at AGRA’s offices in Nairobi with responsibility for the strategic management of the AECF, including liaison with AGRA, the AECF donors and the Fund Manager. Other functions include:

– Coordinating the activities of the Governing Council
– Recommending strategies, policy changes etc.
– Ongoing quality and process control over the operations of the Fund and the activities of the Fund Manager
– Monitoring the external environment of the Fund
– Liaison with related programs, such the Investment Climate Facility
– Fund raising for the AECF
– Reporting to AECF donors
– The wider function of distillation and dissemination of learning from the AECF portfolio lies in the remit of AGRA’s monitoring and evaluation unit.

5. Fund Manager (FM) – KPMG Development Advisory Services (AECF Director, Hugh Scott).
KPMG DAS was awarded the contract to manage the AECF following a competitive tender. KPMG DAS retains the services of Triple Line Consulting (TLC) for monitoring, evaluation and management information systems and Y&R Brands for marketing and communications. The FM is responsible for the day to day operations of the Fund, from its HQ offices in Nairobi including:

– Coordinating the activities of the Investment Committee
– Development of AECF mechanisms and procedures
– Operational management
– Marketing and pipeline development
– Management of the AECF website
– Application and grant allocation process management
– Contracting and management of grants
– Monitoring and evaluation of project implementation

WHAT HAS THE AECF ACHIEVED TO DATE?
The Africa Enterprise Challenge Fund launched in mid-2008 and has since run fourteen rounds of its investment competition, supporting new investment in the agribusiness, renewable energy and adaptation to climate change technologies, rural financial services and media and information sectors, across Africa. Currently AECF has approved 133 projects in 22 countries in Africa.

Four rounds of our general competition have been followed by a series of special windows, targeting Fragile States (such as DRC and South Sudan). AECF has country specific windows for Zimbabwe (3 rounds), Tanzania (2 rounds) and most recently for South Sudan. The Research Into Business (RIB) and the Renewable Energy and Adaptation to Climate Technologies (REACT) windows are more sector-specific. RIB has had two rounds that targeted innovative business ideas that would commercialize the results of agricultural research. 9 RIB Round 1 competition finalists are now in operation. RIB Round 2 applications are currently being processed. REACT Round 1 and 2 was open to the five countries of the East African Community. 21 businesses from REACT Round 1 were recently contracted. REACT Round 2 closed on 15th December 2011 and processing of applications is ongoing.

To date over 4,230 applications have been received and 89 projects have been awarded funding (commitment US$65m). A further US$24, 371, 658 m has been committed to these projects by the private sector. Overall the response from the private sector has been excellent with competition for AECF funds intense.