FMO, the Dutch entrepreneurial development bank, has committed USD 12.5 million to Acumen Resilient Agriculture Fund II (ARAF II), a private equity fund that invests in agribusinesses supporting smallholder farmers across Africa adapt to climate change, improve their livelihoods and strengthen food security. Building on the success of ARAF I, which reached more than 3 million smallholder farmers, ARAF II will expand from East and West Africa into North Africa and aims to benefit at least 4 million additional farmers.
ARAF II will invest in sustainable agribusinesses that provide smallholder farmers with access to markets, finance, agricultural inputs and advisory support. By strengthening the businesses that serve farmers, the fund seeks to improve farmer productivity and incomes while building the resilience of agricultural value chains across Africa. FMO joins returning investors the Green Climate Fund (GCF) and Proparco, and new investors Swedfund, Belgian Investment Company for Developing Countries (BIO) and the Fund for Agricultural Finance in Africa (FASA) in supporting the fund managed by Acumen Capital Partners. FMO's commitment is made possible through Building Prospects, a Dutch government fund managed by FMO.
Smallholder farmers are central to Africa's food systems, yet many remain disconnected from the services and market opportunities needed to improve productivity and incomes. ARAF I demonstrated that access to agricultural inputs, markets, climate information and advisory services can help farmers adopt climate adaptation practices and strengthen resilience, with more than 80% of farmers reporting improved incomes and yields.
African farming systems remain highly dependent on rainfall, with irrigation covering only around 5% of cultivated land. As droughts, floods and changing rainfall patterns become more frequent, many farmers have limited tools to manage these risks. The fund will expand access to climate-resilient seeds, innovative financial services, digital tools, weather information and agricultural advisory services, helping farmers adapt to changing climate conditions while supporting food security across Africa.
Peter Bryde, Director Private Equity (PE) at FMO, said: “We are proud to continue our support of Acumen Capital Partners through anchoring ARAF II, the follow-on fund of our existing investment, ARAF I. We are excited to see the fund manager continue implementing its distinct strategy that is both commercial, impactful and supports the financial and climate resilience of smallholder farmers across Africa. ARAF II successfully reached first close at USD 64.5m which is a great achievement in today’s challenging fundraising environment.”
About ARAF
ARAF is an impact fund that invests in fast growing agri and food companies with business models that help African smallholder farmers become more resilient to climate change. ARAF is managed by Acumen Capital Partners, a wholly owned subsidiary of Acumen. Learn more at www.ARAFund.com
