Project detail - OMNIVORE PARTNERS INDIA FUND 2

OMNIVORE PARTNERS INDIA FUND 2

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Who is our client

Omnivore Partners India Fund 2 is a fund that focuses on investments in early stage agricultural technologies and innovative food companies in India. The first close of the fund took place in January 2018. FMO and another European DFI aim to commit to the fund in July 2018 at the second close.

Funding objective

FMO will be a minority investor and intends to provide capital to the Fund to reach a desirable/sustainable size of about USD 70mln. The Fund will implement a strategy of investing in early stage companies where agricultural technologies and innovative food concepts make a difference, primarily in India and possible world-wide if the technology can be transferred outside. The future investees of the Fund will aim (i) to eliminate current deficiencies in the supply chain and (ii) to make agriculture and food industry in India more sustainable by developing appropriate technologies.

Why we fund this project

The Project fits the strategy of FMO to invest in agribusiness and sustainable future. From the supply side, Indian agriculture is impacted by inefficient techniques and absence/lack of technology, climate change, urbanization, a collapsing water table, declining soil fertility, rising rural labor costs and a failing logistics system. Agricultural productivity is still significantly lower than average yield levels worldwide. In addition, agricultural waste on fields takes a significant part of the produce. Population growth, rising incomes, and dietary transformation are putting a strong demand driven pressure on Indian agriculture. This demand offers a great market opportunity as well as a good opportunity to create impact.

Environmental and social rationale

E&S risk category for the Fund has been determined as category B (medium risk) based on the pipeline. Fund will invest in technologies for food and agriculture. As the Fund is doing early stage funding, it will mainly invest in small and emerging companies that are not yet exposed to high E&S risks. Limited number of investments with exposure to smallholder farmers might be exposed to potential risks related to forced or harmed labor and safety issues (PS2), sustainable management of natural resources (PS6). Other investees might have production or assembling facilities with majority of risks related to PS1, PS2 and PS3. FMO together with other DFIs/investors will assist the Fund in developing a prudent ESMS to address country and project specific risks.

Region
Asia
Country
India
Sector
Agribusiness, Food & Water
Signing date
4/15/2019
Total FMO financing
USD 7.00 MLN
Fund
Building Prospects
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
B