January 12, 2016

Danish Agribusiness Fund to benefit world's food production

PensionDanmark, along with Denmark, IFU and PKA, are investors in the new Danish Agribusiness Fund.

The fund will support projects and companies by helping to enhance food production in developing countries which Danish firms contribute to. Regions include Asia, Africa, Latin America, and parts of Europe.

The fund operates on market conditions, ensuring investors a competitive return.

PensionDanmark will inject DKK200 million (US$29.2 million) in the new Danish agricultural investment fund. The DKK700 million (US$102.2 million) fund consists of DKK88 million (US$13 million) from development aid, DKK212 million (US$31 million) from IFU and DKK200 million (US$29.2 million) from PensionDanmark and PKA respectively.

The fund is expected to raise an additional capital of DKK100 million (US$15 million) in a second closing. The funds will also generate investments of close to DKK6 billion (US$873.6 million) in improved production, distribution and food sales in developing countries. Projects to benefit from the fund involve the entire value chain, from farm to fork, and where a Danish commercial interest is included - thereby increasing the export of Danish technology and know-how.

"Like the Danish Climate Investment Fund, the Danish Agribusiness Fund is a good example of how public and private capital can work together to address global societal challenges in a way that benefits both Danish companies and investors. The two funds illustrate that the best form of development aid is business", said Torben Möger Pedersen, CEO of PensionDanmark.

"Danish agricultural and food companies are among the most efficient in the world. Consequently, these companies can help to increase the production of much-needed food in developing countries," Kristian Jensen, Denmark's Foreign Minister, commented. "However, there is a need for risk capital if the potential is to be realised. That is exactly what the new fund will contribute to. Accordingly, this initiative is in line with the global UN goal to increase private investment in the agricultural and food sector in developing countries."

Total investments to date amount to DKK165 billion (US$24 billion).

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