PA00TDV7

Feed the Future
East Africa
Catalytic Sustainable Agribusiness Investment (CSAI)
Activity
Final Report
July 19, 2016 – August 31, 2018
Submitted to
USAID Agreement Officer’s Representative
by SNV on October 15, 2018
7514 Wisconsin Avenue, Suite 400, Bethesda, MD 20814
AID-OAA-A-16-00035
Sponsors of the activity: USAID Bureau for Africa and Bureau of Economic Growth,
Environment and Education, USAID Bureau for Food Security
i
AID-OAA-A-16-00035
Feed the Future East Africa Final Report
Catalytic Sustainable Agribusiness Investment Activity
1.1. ACTIVITY INFORMATION.......................................................................................................................... 2

1.2. EXECUTIVE SUMMARY............................................................................................................................. 2
1.3. PROJECT STRATEGY AND CLIMATE SMART AGRICULTURE APPROACH..................................................................3
1.4. SUMMARY OF MAJOR ACCOMPLISHMENTS IN ACHIEVING PROJECT RESULTS AND IMPACT......................................5
1.5. MAJOR CHALLENGES AND PROGRESS IN ADDRESSING THEM..........................................................................10
2.1. CSAI STANDARD INDICATORS.................................................................................................................. 12

2.2. GHG EMISSIONS REDUCTION.................................................................................................................. 15
2.3. LEARNING.......................................................................................................................................... 15
3.1. WORK PACKAGE 1............................................................................................................................... 20

3.2. WORK PACKAGE 2............................................................................................................................... 25
3.3. WORK PACKAGE 3............................................................................................................................... 28
3.4. INVESTMENT PIPELINE........................................................................................................................... 35
4.1. PROSPECTS FOR SUSTAINABILITY.............................................................................................................. 36

4.2. RECOMMENDATIONS.................................................................................................................................... 36
Page | ii
AID-OAA-A-16-00035
Feed the Future East Africa Final Report
Acronyms and Abbreviations
AFOLU Agriculture, Forestry, and Land Use (carbon calculator)

ASAL Arid and Semi-Arid Lands
AWP Annual Work Plan
BAA Broad Agency Announcement
BoP Bottom of the Pyramid
CF Climate Focus
CLEER Clean Energy Emission Reduction
CSA Climate Smart Agriculture
CSAI Catalytic Sustainable Agribusiness Investment Project
DFID UK Department for International Development
DIV Development Innovation Ventures
ESCO Energy Service Company
FAO Food and Agriculture Organization of the United Nations
FICCF Finance Innovation for Climate Change Fund
FtF Feed the Future
FTFMS Feed the Future Monitoring System
GHG Greenhouse Gas Emissions
KALRO Kenya Agricultural Livestock & Research Organization
KPI Key Performance Indicator
MOU Memorandum of Understanding
NDA Non-disclosure Agreement
PPA Power Purchase Agreement
PV Photovoltaic
SLS Smart Logistics Limited
SME Small and Medium-Sized Enterprises
SSA Sub-Saharan Africa
USAID U.S. Agency for International Development
WP Work Package
Page | iii
i
AID-OAA-A-16-00035
Feed the Future East Africa FY 2018 Annual Report
OVERVIEW
1.1. Activity Information
Activity Title Feed the Future East Africa – Catalytic Sustainable
Agribusiness Investment Activity
Cooperative Agreement AID-OAA-A-16-00035
Activity Start Date July 19, 2016
Activity End Date August 31, 2018
Prime Implementing Partner SNV USA
7514 Wisconsin Ave, Suite 400, Bethesda, MD 20814
Sub awardees UNIQUE, Climate Focus
1.2. Executive Summary

The Feed the Future (FtF) East Africa Catalytic Sustainable Agribusiness Investment Project (CSAI) seeks
to promote climate smart agricultural development in East Africa. The overall project’s objective is to
identify and promote sustainable agriculture innovations through business incubation and scaled-up private
and public investment into business models. The project is implemented by the consortium of
SNV, Climate Focus and UNIQUE Forestry and Land Use GMBH (the Consortium).
The aim of the project is aligned with the objectives of the U.S. Government's global hunger and food
security initiative, Feed the Future, - of increasing productivity, incomes to smallholder farmers, gender
equality, climate resilience, and food security, while reducing poverty and greenhouse gas
(GHG) emissions. The Project is also aligned with governments’ national commitments in building climate
resilient economies in Kenya and Ethiopia. The project worked to achieve this through three mutually
reinforcing work packages:
 Work Package 1 (WP1): Create an enabling environment for public and private sector
investment in climate smart agriculture (CSA) in Kenya and Ethiopia
Page | 2
AID-OAA-A-16-00035
 Work Package 2 (WP2): Incubate climate smart inclusive agribusinesses to help them
access private investment in Kenya and Ethiopia
 Work Package 3 (WP3): Accelerate private and public capital into scalable climate smart
agriculture businesses in Kenya and Ethiopia
The project employed a strategy of targeted support to promising business models and active
engagement with key public and private stakeholders in the agribusiness investment landscape in
these countries, aligning with key FtF program objectives. The Consortium has identified and
addressed a number of barriers that limit investment and expertise into climate smart agriculture in
Kenya and Ethiopia. The project aimed to identify and grow business models that are explicitly climate
smart, and support model building through providing proof of concept for scaling-up CSA investments at
two major entry points in a business investment cycle: testing CSA innovations and scaling up CSA
investments.
By the end of the reporting period, the project had a pipeline of 32 enterprises – 27 in Kenya
and 5 in Ethiopia receiving incubation and acceleration support in the form of business advisory,
analysis, training & coaching, technical assistance, outsourced research, co-financing, public-private
dialogue, strategic partnerships and investor linkages all aimed at helping the enterprises expand their
business and attract more investments. So far, closed deals represent USD 1,370,000 in
investment.
A number of other deals are at various stages of negotiations with those that are at advanced stages
having an estimated values of USD 8.2M. Projected GHG emission (CO2) reduced or avoided by
participating enterprises through 2030 from adopted laws, policies, regulations, investments or
technologies is estimated at 948,565 tons.
The project has seen a number of revisions and transition of team members both for the implementing
partners and USAID. The project team has engaged regularly with U.S. Agency for International
Development (USAID) staff and maintained the collaborative ethos of the broad agency announcement
(BAA) process to ensure effective coordination between the work packages.
The political uncertainties in both Kenya and Ethiopia have adversely affected the investment climate. In
Ethiopia these uncertainties have resulted in only two investees being identified by the end of year 1.
Later when Ethiopia had lifted a state of emergency, Work Package 2 has been expanded into Ethiopia
and by the end of the project a total of five enterprises were receiving support from the Project.
The capping of interest rates chargeable by banks by the Central Bank of Kenya has dried up liquidity in
the market and slowed growth country wide. Moreover, the prolonged uncertainties around
the presidential elections in Kenya have also reduced appetite for risk and delayed decision
making on investments. In spite of the challenges, the Consortium has been able to meet most of the
targets with the exception of levels of investment deals closed. Section 1.4 details actual
accomplishments against the objectives established for the life of the project and progress made toward
established benchmarks and results indicators of impact for CSAI.
1.3. Project Strategy and Climate Smart Agriculture Approach

The project strategy aimed to capitalize on the convergence of interests in developing CSA among local
communities, national and multinational agribusiness and food industries, and commitments to support
Page | 3
AID-OAA-A-16-00035
sustainable agriculture made by key public and private investors, specialist funds and institutional investors.
Page | 4
AID-OAA-A-16-00035
The Consortium has identified and addressed a number of barriers that limit investment and expertise
into climate smart agriculture in Kenya and Ethiopia. The project aimed to identify and grow business
models that are explicitly climate smart, and support model building through providing proof of concept
for scaling-up CSA investments at two major entry points in a business investment cycle: testing
CSA innovations and scaling up CSA investments.
The Consortium worked to match investment opportunities with the growing community of
investors interested in CSA to facilitate the adoption of CSA practices along the value chain that support
climate mitigation and adaptation. The overall project strategy aimed to develop an inclusive CSA
market that promotes the role of the private sector within climate resilient agricultural sector growth is
presented in the Figure 1 below.
Figure 1. Project Strategy to Develop an Inclusive CSA Market

The original project strategy has been adjusted and Project and geographic scopes reduced as the
budget and the implementation timeframe have been decreased compared to the original project
design. Decreased implementation timeline affected the opportunity to attract investments and
replicate the business models.
The project adopted an approach that addresses both demand and supply side constraints for
investment in CSA business models, and interventions in the various work packages trigger uptake by
the market. The approach towards the competitive performance, match making and scale up is
presented in Figure 2.
Page | 5
AID-OAA-A-16-00035
Figure 2. Phased Project Approach

CSA Agriculture Approach
Agriculture is not only the main engine for economic growth, poverty reduction, and food security in
East Africa, but also the sector most vulnerable to climate change. Therefore, the priority of the project
was to increase resilience to slow-onset climate change and more frequent extreme weather
events by maximizing agriculture-based incomes that are risk-adjusted for climate change while
maintaining environmental health. Applying the CSA definition adopted by USAID from FAO, the
project aimed to increase sustainable productivity, strengthen farmers’ resilience to climate
change, and reduce GHG emissions where appropriate by increasing investment in a climate smart
approach to agriculture. The Project focused its efforts at multiple points along the value-chains from
land management and waste on the farm to reducing food loss, transport, storage, and market access
off the farm.
1.4. Summary of Major Accomplishments in Achieving Project Results

and Impact
The following graphic summarizes our major achievements between July 2016 and August 2018:
Number of new firms screened for

suitability for engagement as potential 54
incubatees and investees
Total firms actively being incubated

32
or accelerated by CSAI
Page | 6
AID-OAA-A-16-00035
Number of business plans, feasibility studies,

and concept notes in development for
incubatees (Work Package 2) and investees 26
(Work Package 3) to attract external
investment
Dollar value of investment achieved $1,370,000
Investment pipeline at end of reporting

$8.254M
period
Projected GHG emission (CO2) reduced or

avoided through 2030 from adopted laws,
948,565 tons
policies, regulations, investments or
technologies
Number of agricultural enabling

environment policies analyzed, consulted on, 5
drafted or revised with USG assistance
Page | 7
AID-OAA-A-16-00035
1.4.1. ENABLING ENVIRONMENT FOR PRIVATE SECTOR CSA INVESTMENTS

The ecosystem for climate smart agricultural investments consists of CSA-related enterprises seeking
capital, investors interested in supporting sustainable agriculture, the enabling environment for investments,
and service providers or facilitators supporting CSA investments.
In Kenya, there are few fiscal incentives to encourage either agricultural or CSA-specific investments. This
is further compounded by weak policy integration and coordination among key political institutions and
stakeholders. The prevailing lack of financial and capital market regulations, high or capped interest rates,
collateral requirements, and tax policies are all barriers to investors potentially interested in CSA ventures.
There is some interest in renewable energy, “green” infrastructure, and innovative technologies, but
CSA is not considered a distinct investment class with proven attractive returns among impact investors.
Kenya, however, still remains the most popular investment destination in East Africa with financial services,
energy, natural resources, and FMCG (fast-moving consumer goods) as the dominant sectors. Most of the
investors indicate that they give environmental, social and governance matters very high importance during
the lifetime of their investment. The sector has seen a shift in PE investment – from an agribusiness
focus, to financial services and manufacturing.
A lack of access to financial services is reflected in Ethiopia’s economy and socioeconomic development.
In the most recent Ethiopian enterprise survey conducted by the World Bank, businesses ranked access
to finance as the second most severe constraint on their development.
Page | 8
AID-OAA-A-16-00035
1.4.2. COUNTRY SPECIFIC ACCOMPLISHMENTS:

The project was initially set out to focus on East African countries of Ethiopia, Kenya and Uganda.
Uganda was later dropped due to the limited time and budget. Implementation largely happened in
Kenya with activities in Ethiopia mainly happening in the second year of implementation.
Accomplishments - Kenya
The project initially focused on Kenya given that it has the most advanced agri-business sector in
East Africa and that most of the institutional investors with a presence in East Africa are based in
Kenya. It also has strong climate related policy, legislative and strategic frameworks that this
initiative can contribute to and a desire that these will align with national development priorities
(Vision 2030).
Kenya therefore took the biggest share of the implementation activities with 84% of the enterprises
supported by CSAI being based in Kenya. Kenya takes about 50% of the impact investment disbursed to
the region. CSAI has engaged over 20 investors in Kenya resulting in over $ 1M in investments and over
$8M in the pipeline. The Project also organized two public private dialogues in the country focused on
identifying policy interventions that could address barriers to investment in CSA in Kenya.
CSAI faced a number of challenges in Kenya. The capping of interest rates chargeable by the Central
Bank of Kenya has dried up liquidity in the market and slowed growth country wide. Moreover, the
prolonged uncertainties around the presidential elections also reduced appetite for risk and delayed
decision making on investments.
Accomplishments - Ethiopia
CSAI started screening enterprises in Ethiopia in year one but it was until year 2 that five enterprises
were recruited for support. Ethiopia experienced a relatively tense political atmosphere in the first year
with lengthy periods of curfews. The Country transited peacefully to a new Premier that is
establishing a promising stable economic and political environment for foreign investment. CSAI has
taken advantage of this promising economic environment to support five enterprises helping them to
position themselves to take advantage of the many investors who are eyeing huge investment
opportunities in the country. The highly controlled forex though remains a major challenge for the
investors.
CSAI through SNV Ethiopia hosted the Ethiopian Agribusiness Impact Investment Discussion Forum. The
forum brought together stakeholders including representatives of the investor sector in Ethiopia
and growing enterprises including CSAI pipeline. The objective of the forum was to share key
findings of country-level landscaping study on agribusiness impact investment among key stakeholders;
validate the findings of the study among key stakeholders and produce comprehensive learning
document to share with wider interest group, and discuss key challenges and opportunities and possible
recommendations to boost impact investment in the agribusiness sector in the country. The findings of
the study have been shared under the lessons learned section.
Page | 9
AID-OAA-A-16-00035
1.4.3. SECTOR SPECIFIC ACCOMPLISHMENTS

CSAI was not limited to specific value chains though FtF priority value chain in each category were to be
given priority. The FtF priority value chains in Kenya are horticulture, dairy, maize (and other staples)
and livestock. In Ethiopia, the priority value chains are maize, wheat, sesame, coffee, honey, chick pea,
livestock, dairy, Irish/orange-fleshed sweet potatoes. CSAI managed to support enterprises that are
working in most of these value chains including maize, horticulture, dairy, honey and livestock. In
addition and with the approval of AOR, the Project worked with enterprises in aquaculture, forestry and
finance. Majority of the enterprises CSAI has worked with are in agri-processing sector (mostly livestock
feed). Chart 1 shows the spread of enterprises against sectors.
Acqauculture
6%
Horticulture
9%
Forestry
6%
Finance
(Climate)
6%
Agri-processing
28%
Extensive livestock
& fodder production
16%
Cereals & other

staples
Dairy 13%
16%
Chart 1: Sectors represented by CSAI enterprises

A number of investors shy away from investing in primary agriculture production, as it is considered to
be too risky, especially in East Africa where agriculture is mainly rain fed. Agri-processing is considered
a safer stage for investment. CSAI has supported two enterprises that were offering agriculture financing
solutions to search for more wholesale financial opportunities through advanced discussions
with interested investors.
Page | 10
AID-OAA-A-16-00035
1.5. Major Challenges and Progress in Addressing Them

The agricultural sector in East Africa has long been neglected by climate policy makers despite its
significance as a contributor to climate change and its disproportionate exposure to climate change
impacts. Finance for sustainable land management and climate smart agriculture practices in particular
remained sparse. Compared with other regions on the continent, the maturity of capital markets in
Kenya specifically has meant that the investment landscape in Kenya is more open to CSA innovation
and investment. The prevailing challenge, however, remains the identification of viable and structured
CSA businesses with proven business models that promise appropriate returns. Common investment
barriers include the lack of technical knowledge and capacity, limited market and capital access, and
others. Table 1 outlines challenges that Project has faced and actions taken.
Table 1. Challenges and Actions Taken
Problem Steps Taken Results Comments
to Address
Strong demand for and Limit support to Effective strategy The resulting
limited supply of assistance and not for excluding competition should be
businesses that are near providing grant businesses mainly good for businesses, but
the investment ready funding. interested in more only a small number
stage, both by investors Communicated a need grant manage to secure
and accelerator (and to move from grant investment and many
similar) programs. to investment stage. have an over-reliance on
donor programs.
Program design does not Co-financing of Improved Over-reliance on grant
include grant funding technical assistance production funding is an obstacle.
or seed capital and specialized capacity, QA, and
marketing Co-financing approach
component, making equipment to support encouraging; respected
CSAI a less attractive scale-up and quality and encourage ownership
partner to enterprises assurance (QA). on part of enterprise.
relative to other
donor-funded
programs.
Businesses can be slow to Set clear timelines for This has resulted in Requiring co-investment
prepare materials because businesses. signing fewer is a useful strategy to
of their limited resources Closer attention engagement get a firm commitment
and need to maintain paid to business agreements with from companies.
business operations, but engagement during the businesses, but
this hurts investor screening process, higher quality
engagement. Preparing engagement with Another option to
declining to work with address this problem in
documentation on their businesses that did the companies that
behalf is not seen as a CSAI does work the future is to have
not provide resources dedicated to
good solution, as investors information in a with.
want to see business hiring people to work for
timely manner and a business for a particular
ownership. discontinuing support need (e.g. an accountant).
Page | 11
AID-OAA-A-16-00035
Problem Steps Taken Results Comments

to Address
for businesses that In some cases,
repeatedly did not companies also
comply, despite increase their pace
support being while other opt
provided. to leave the
program.
Extremely specific CSAI has expanded its Better matching at Developing new investor
investor investment investor network to early stages has led networks was time-
criteria make it difficult to best match the to more consuming for CSAI
match projects in needs of its partner advanced and delayed the
pipeline to appropriate companies. Build a discussions investor- matching
investor. diverse investor between process. More time may
pipeline of focus on companies and be required to clearly
developing deals based investors. Mixed, determine
on requirements of the strategy did not effectiveness.
select investors. yet produce
results.
Challenge in maintaining CSAI co-shared Realized improved A useful strategy
the momentum of costs for key momentum for but ensure the
incubation due to technical some of the supported staff can
unavailability of enterprise resources, such as enterprises continue be engaged
staff to lead in agreed accountant services including improved post Project
technical assistance areas and marketing, to fill performance in support.
due to competing business gaps. sales.
roles.
Supported businesses
in identification of
candidates for key
roles.
Encouraged businesses
to continue working
with TA after the
project, either as staff
or through
incentive- based
contracts.
Challenges related to Coaching Owners verbally Widespread problem
cultural practices in entrepreneurs to agree on the need that a few entrepreneurs
business management that separate business and to professionalize manage to overcome.
create barriers for personal expenses their business but
external investments Conveying the find it challenging
importance of formal to implement.
books in order to
attract investors
Page | 12
AID-OAA-A-16-00035
MONITORING, EVALUATION & LEARNING

CSAI being an FtF Activity is bound to use the standard FtF Indicators to measure project performance,
as guided by the Global Food Security Strategy (GFSS). A total of five FtF indicators were adopted. CSAI
also selected two indicators from Global Climate Change (GCC) Standard Indicators for tracking.
The team also proposed two custom indicators in an effort of making the monitoring and evaluation
process comprehensive. In total CSAI has been monitoring nine indicators as summarized in Table 2.
Table 2. CSAI Project Indicators with Life of Project (LOP) targets
Source Number Description LOP
Projected greenhouse gas emissions reduced or avoided through

EG 13-7 2030 from adopted laws, policies, regulations, investments or 1.32M
Climate
Change
Global
technologies related to landscapes and supported by USG assistance
Amount of investment mobilized (in USD) for climate change

EG11-4 $6M
adaptation as supported by USG assistance
EG 3.1- Number of agricultural enabling environment policies analyzed,

5
12 consulted on, drafted or revised with USG assistance
Number of firms (excluding farms) or civil society organizations
Feed the Future (FtF)
(CSOs) engaged in agricultural and food security related

EG.3.2- 6
manufacturing and services that have increased profits or become
21 financially self-sufficient with USG assistance
Number of firms receiving USG funded technical assistance for

15
EG.5.2-1 improving business performance
EG.3.2- Value of new private sector capital investment in the agriculture

$5M
22 sector of food chain leveraged by Feed the Future implementation
EG.3.2-6 Value of agricultural and rural loans as a result of USG assistance $1M
Number of public-private dialogue events 3

Custom
Number of concept notes, business plans and feasibility studies

20
developed
2.1. CSAI Standard Indicators

CSAI has developed a primary data collection tool to track six of the nine indicators described
above. The remaining three indicators that were not tracked by the tool include:
 EG 13-7: Projected GHG emissions reduced or avoided through 2030 from adopted laws, policies,
regulations, investments or technologies related to landscapes and supported by USG assistance;
Page | 13
AID-OAA-A-16-00035
 EG 3.1-12: Number of agricultural enabling environment policies analyzed, consulted on, drafted
or revised with USG assistance; and
 Custom indicator: Number of public private dialogue events organized.
Tracking of indicator EG 13-7 have been completed to ensure compliance with USAID parameters when
possible, with deviations and alternative methodologies described in detail in Section 2.2.
Indicator EG 3.1-12 along with the number of public private dialogues were tracked individually.
CSAI was created as an active Implementing Mechanism (IM) under the Feed the Future Monitoring
System (FTFMS). CSAI collected data, summarized and uploaded it to the FTFMS system during the
November 2017 open window and reviewed and approved in March 2018 open window. Apart from
the standard indicators, CSAI has summarized key lessons learned over two years of project
implementation in Section
2.3 and provides a more comprehensive, aggregated assessment of lessons learned as an annex to this
report.
Table 3. CSAI Standard Indicators
Ref. No Activity Planned or Target Actual Comments on Deviation

Performance LOP between Target and
Indicator Achievement
EG11-4 Amount of investment $6,000,000 $1,370,000 Unable to close additional
mobilized (in USD) deals despite healthy
for climate change pipeline due to lengthy
adaptation as supported process of deal
by USG assistance negotiations. Discussed in
Challenges Section.
EG 13-7 Projected greenhouse 1.32 million 948 565 It was difficult to quantify
gas emissions reduced tons CO2 tons CO2 the emissions reductions
or avoided through of many of the businesses
2030 from adopted supported by CSAI, for
laws, policies, methodological and data
regulations, investments collection reasons. CSAI
or technologies related expects that the target
to landscapes and would be met if every
supported by USG business could be measured.
assistance
EG 3.1-12 Number of agricultural 5 5 These were mainly on

enabling environment standardization, certification,
policies analyzed, aggregation and in ICT, dairy
consulted on, drafted or & cotton
revised with USG
assistance
Custom Number of public- 2 5 There were two PP
private dialogue events. dialogues, Africa CSA
Page | 14
AID-OAA-A-16-00035
Ref. No Activity Planned or Target Actual Comments on Deviation

Performance LOP between Target and
Indicator Achievement
Summit, Bridging the gap &
ET sharing event.
EG.3.2-21 Number of firms 6 6 Sales performance improved
(excluding farms) or for Elite Innovations &
civil society Ruhamah in 2017 & 2018.
organizations (CSOs) Profitability improved for
engaged in Ekule & Eurofresh in 2017 &
agricultural and food 2018. Profitability for
security related KOFAR improved in 2018.
manufacturing and Sales improved for VF in
services that have 2017.
increased profits or
become financially self-
sufficient with USG
assistance
EG.5.2-1 Number of firms 15 32 All the enterprises
receiving USG funded supported in Kenya &
technical assistance for Ethiopia via different forms
improving business of TA
performance
EG.3.2-22 Value of new private $4,000,000 $120,000 Most of the enterprise are
sector capital at the startup phase and also
investment in the in agriculture value chains
agriculture sector of making them too risky for
food chain leveraged private capital.
by Feed the Future
implementation
EG.3.2-6 Value of agricultural $1M $500,000 Most enterprises prefer
and rural loans as a debt but lack collateral
result of USG or supporting cash
assistance flow.
Investors prefer to lend in
gradual/ incremental
manageable amounts.
Custom Number of 20 26 These were mostly BPs,
concept notes, concept notes, investor
business plans and pitch decks & financial
feasibility studies models
developed.
Page | 15
AID-OAA-A-16-00035
2.2. GHG Emissions Reduction

Measuring projected greenhouse gas (GHG) emission reduced or avoided also proved to
be challenging. Many of the CSAI-supported businesses contribute to GHG reduction/mitigation,
however measuring this impact was challenging for a few reasons:
 No methodologies exist for quantifying the greenhouse gas impact of a particular intervention;
 Data collection of necessary data can be extremely time-consuming; and
 Technical data required is too complex or abstract for average enterprises to readily provide or
calculate accurately.
As a result of these considerations and to ensure limited resources would be used effectively to achieve
the broader objectives of CSAI - it was agreed with USAID that the measurement of GHG
emissions impacts would be decided on a case-by-case basis. Namely, the project would quantify CSAI
interventions where there would likely to be a significant contribution to greenhouse gas emissions
reductions and measuring this reduction is straightforward. However, if an intervention was not
expected to have a significant GHG reduction component, or measuring this impact would be very time
consuming, it was agreed that CSAI would describe the GHG impact in a qualitative manner.
GHG emissions reduction interventions are compared against available methodologies in USAID emissions
monitoring tools, specifically, Clean Energy Emission Reduction (CLEER) and the Agriculture, Forestry,
and Other Land Use (AFOLU) carbon calculator. A methodology is decided upon. CLEER is used
to estimate emissions reductions in projects that substitute a GHG-intensive source of energy with a
cleaner source of energy or reduce emissions through energy efficiency. AFOLU is used in projects
that have changes in land use or animal husbandry management practices.
In the case that the intervention cannot be measured using an existing CLEER or AFOLU methodology,
CSAI identifies other potential methodologies for measuring GHG emissions reductions, e.g. Cool Farm
Tool. Having examined all the 32 CSAI-supported enterprises, the Project identified only 10
that implemented interventions that had measurable reductions on GHG emissions.
2.3. Learning
One of the key undertakings of the Consortium was to document and disseminate data and lessons
learned during the implementation of the Project. This section summarizes main lessons learned activities,
learning themes, key learning products, and knowledge sharing events and channels. The report with the
findings of an assessment of lessons learned during implementation of the CSAI activity is presented in
the annex.
The project had set out as part of its learning agenda to focus on the FtF learning agenda theme
of “Expanded markets, value chains and increased investment,” emphasizing the climate smart
dimension whenever possible with the following illustrative learning themes:
Theme 1 - Commercializing and Expanding Climate Resilience Research: How do we build
a coalition to commercialize climate relevant research?
Theme 2 - Applying a Business Systems Approach to Climate Smart Technology Transfer: Climate
smart technologies are being developed, however the roll-out of such technologies within
the market is still being tested.
Page | 16
AID-OAA-A-16-00035
Theme 3 – Animal Feed and Climate Resilience: CSAI has been working to support the
development of alternative sources of animal feed that do not directly compete with human food,
have lower Green House Gas (GHG) emissions associated with their production, and can
be produced even under conditions of climate stress.
Theme 4: Cultural Norms and Climate Smart Businesses in Kenya
Theme 5 - Social Impact and Climate Smart Investments
Theme 6 - Challenges for small and medium-sized businesses with climate smart business
models to attract investment
The Project has produced four short briefs on this theme:
 Credit as a barrier to smart agriculture in Kenya https://www.agrilinks.org/post/credit-barrier-
smart-agriculture-kenya
 Introducing new entrepreneurs to the investment world
https://www.agrilinks.org/post/working- entrepreneurs-are-new-investment-world
 Navigating the cultural norms of informal businesses to increase agribusiness investments
https://www.agrilinks.org/post/navigating-cultural-norms-informal-businesses-increase-
agribusiness-investments
 CSAI Assessment of Lessons Learned
Theme 7 – Challenges in quantifying GHG impacts with the private sector

CSAI had GHG emissions reductions as one of its KPIs, so measuring emissions was a key part of
the projects monitoring and evaluation process. Primarily, CSAI used USAID tools to make
these measurements, although it used other tools in a few cases.
Page | 17
AID-OAA-A-16-00035
2.3.4. KNOWLEDGE SHARING EVENTS AND CHANNELS

The Project has created a rich project narrative describing FtF-supported CSA technologies,
key accomplishments, activities, lessons learned from the project’s implementation, and opportunities for
CSA efforts moving forward.
CSAI has utilized a variety of print and electronic mediums through which to showcase its lessons
learned, along with participation in several events to share information, and catalyze discussions around
investment opportunities and challenges. Below is a summary of main CSAI events and presentations:
Public-Private Dialogue, Nairobi, Kenya (February 8, 2018):
The purpose of this meeting, led by Climate Focus, was to identify and discuss opportunities for policy
interventions that will address current barriers to investment in climate smart agriculture in Kenya.
Held among a small group of stakeholders, including participants from the donor community, the
discussion revolved around the question of what the public sector can do to improve the enabling
environment for scaled-up investment in CSA.
Ethiopia Investment Forum, Addis Ababa, Ethiopia (April 2018):
This small-scale dialogue was organized by SNV’s Ethiopia team and included participants from
three Ethiopia enterprises (Amba, Menangesha, and Shemu), investment sector players (banks,
MFIs), policymakers, and project staff. The primary topic of the discussion was current
challenges and opportunities for SMEs to access finance in Ethiopia. Key outcomes and
participant feedback were integrated into the Ethiopia Investment Policy Brief.
Africa Climate Smart Agriculture Summit, Nairobi, Kenya (May 15-16, 2018):
The Summit provided an opportunity for cross-sector networking and knowledge exchange, bringing
together an array of stakeholders that included regional governments, policy makers, private
sector, research organizations, UN agencies, and civil society. The representatives of all three
Consortium partners attended the Summit to share CSAI experiences and get insights from
experiences of other stakeholders in impact investment. CSAI hosted a roundtable discussion on
Balancing Demand and Supply for Impact Investment.
USAID Brownbag, Washington, DC, (May 2018):
In collaboration with the project’s AOR, CSAI had organized an informal roundtable discussion
with USAID colleagues at the Reagan National Building. The presentation covered: (1) brief background
about the project, (2) summary of achievements against indictors, (3) lessons learned from
implementer’s perspective (BAA observations), and (4) overall lessons learned on key challenges in
attracting investment in small CSA enterprises.
Global Landscapes Forum, Washington, DC (May 30-31, 2018):
SNV and Unique staff members attended the GLF Forum in May, 2018. The event aimed to advance the
application of sustainable finance for land management. Highlighting proven deal structures that deliver
both strong financial returns and landscape restoration, the symposium facilitated dialogue between a
diverse range of actors from the worlds of business, politics, academia, NGOs, civil society, local land
users and the media.
Page | 18
AID-OAA-A-16-00035
CSAI Closeout Event, Nairobi, Kenya (June 2018):

The project closeout event hosted over 50 guests and participants from key sectors, including
CSAI- supported enterprises, financial institutions in Kenya, incubators, impact investors, and
representatives of the donor community. The participants discussed:
- Key Challenges and Gaps in CSA Investments
- Possible Solutions to Bridge the Gaps
CSAI team has shared experiences in implementing the Project and lessons and recommendations. The
outcomes of the discussions were incorporated into the CSAI Assessment of Lessons Learned document.
The Consortium made sure that the lessons learned will be shared across a variety of important
platforms, such as Agrilinks, an online hub for agriculture, food security, and development professionals,
as well as the consortium members’ websites and social media outlets. CSAI posted five articles and two
videos clips on Agrilinks.
Page | 19
AID-OAA-A-16-00035
2.3.5. KEY LEARNING PRODUCTS

KEY LEARNING PRODUCTS DEVELOPED UNDER CSAI ARE AS FOLLOWS:
1) Five policy briefs have been produced under CSAI and shared with USAID and other key
stakeholders:
Brief 1: Enhancing Market Access through Improved Standardization, Certification, and Producer
Aggregation Models
Brief 2: Increasing CSA Investment through Fiscal Incentives

Brief 3: Enhancing Investment Attractiveness in Kenya’s Dairy Value Chain
Brief 4: Enhancing Investment Attractiveness in Kenya’s Cotton Value Chain
Brief 5: ICT Solutions for Inclusive Agricultural Supply
2) CSAI Assessment of Lessons Learned developed by an external consultant and the project staff that
reviews and summarizes the Consortium’s learning outputs, as well as contribution from various
stakeholders. The assessment’s preliminary conclusions fed into several project events in May
and June 2018, including the Africa CSA Summit and closeout event in Nairobi, and the
SNV USA Board of Directors Meeting and USAID brownbag presentation.
The assessment aimed to address:
Contextual discussion of the current environment for investment in small and medium enterprises
(SMEs) and climate smart business models;
Analysis of the primary donors and investors to date working in this area;
Assessment of current gaps and challenges as barriers for investment in SMEs working in climate
smart businesses (lessons learned), including cases from CSAI-supported enterprises;
Recommendations/opportunities for both enterprises and investors to improve investment in SMEs
that are climate smart and inclusive; and
Challenges encountered in the implementation of the project, and recommendations to improve
future programming in this area.
3) Three video clips: on Tagasaste/Lucsom, Water hyacinth/BioFit, and project’s closeout event.
4) Brief documents on various issues on CSA investments:
- Credit as a barrier to smart agriculture in Kenya
- Introducing new entrepreneurs to the investment world
- Navigating the cultural norms of informal businesses to increase agribusiness investments.
5) A learning document “Ethiopian Agribusiness Impact Investment Challenges”
Page | 20
AID-OAA-A-16-00035
CSAI PROJECT IMPLEMENTATION

3.1. Work Package 1
Page | 21
AID-OAA-A-16-00035
3.1.1. PROJECT MANAGEMENT (WP ACTIVITY 1.1)

During Year 1, CSAI set up administrative and governance systems as well as the tools that were later
used to screen potential sectors, incubatees, and investors. CSAI was formally launched by Ms. Veronica
Ndetu, the Ministry of Agriculture’s CSA Focal Point, at SNV Kenya office in Nairobi in April 2017
with about 50 representatives from nonprofits, the private sector, and the public sector. The
event was combined with Climate Focus’ presentation of its preliminary analysis of CSA investment
barriers in Kenya. The audience gave valuable feedback to guide the analytical process.
In the first year of implementation, the project team conducted introductory meetings and explored the
potential for collaboration with key partners such as USAID Missions in Kenya and Ethiopia, FtF activities
in both countries, as well as other CSA related projects and accelerator programs, business membership
organizations, regulators, parastatals, and county governments.
The focus in Year 2 was on enhancing the enabling environment to support future climate
smart investment activity, and capturing and disseminating the learning generated from the activity.
a. Project Management Committee
The Management Committee, with representatives from the consortium partners and
USAID AOR, had bi-weekly conference calls to assist in information sharing and coordination
throughout the two years of implementation. The issues discussed included both technical, e.g.
adaptation of the PMP based on learning from project activities, encouraging synergies
across the work packages, and administrative issues.
Committee meetings covered a range of day-to-day issues, along with more strategic discussions
involving calculation of GHG emissions offsets. The Committee members also met in person on
two occasions in Washington, DC; the first meeting was held in October 2017 to review activities
and progress, and the second in May 2018 when the CSAI team presented a brownbag
presentation at USAID.
b. Project Steering Committee

Recognizing the project’s integrated approach and interdependence of activities under three work
packages, the Consortium has established a Project Steering Committee that provided strategic
guidance and recommendations throughout the project implementation, and ensured
the credibility, quality and relevance of the actions. It provided a forum for dialogue between
the consortium members to build consensus on the project’s implementation tactics and to
reconcile differences in opinions when needed. The Steering Committee was chaired by
SNV Project Director and included one representative from Climate Focus, Unique,
USAID, a private investment business, and a local business.
The committee has contributed towards the credibility, quality, and relevance of the
project activities. In addition to regular meetings, the project staff has reached out to
the Steering Committee members on an ad hoc basis.
Partnerships & Stakeholder Coordination
CSAI recognized the importance of identifying and building lasting partnerships and networks to contribute
to the success of CSA enterprises within and beyond the life of the project. The Project aimed to link
Page | 22
AID-OAA-A-16-00035
enterprises with beneficial investment networks, and identify opportunities for the enterprises themselves
to collaborate building on existing synergies. Climate Focus has completed a comprehensive mapping of
investors active in East Africa. CSAI established relations with experienced players in the investment arena
who have investor networks and investor convening experience and platforms, such as Intellecap, Kenya
Climate Innovation Fund (KCIC), Finance Innovation for Climate Change (FICCF) and Aspen Network
of Development Entrepreneurs (ANDE). The Project’s stakeholders list has also included representatives
of Century Microfinance, Center for Global Development, Kenivest, KenyaGAP, Central Bank of
Kenya, Acre Africa, Transu and other governmental and private entities.
By the end of project, the Consortium has facilitated a number of partnerships:
 Egerton University – CSAI engaged the University to support in local research of testing
and validating the nutritional value of Lemna. The Project facilitated a
collaboration between Egerton and DryGro to conduct live tests of animal feed.
 Intellecap – CSAI has linked a number of its enterprises with Intellecap, which offers a
wide range of services to SMEs, including matchmaking with its network of investors and
BDS support.
 The Africa Enterprise Challenge Fund (AECF) provides catalytic funding in the form
of repayable and non-repayable grants to businesses that would not otherwise have
access to adequate financing. AECF has promised to continue exposing CSAI
pipeline to its funding opportunities as well as offer technical assistance where
possible.
 Gearbox – Climate Focus engaged Gearbox, a USAID supported initiative that provides
a flexible working space for hardware entrepreneurs and engineers to support Climate
Focus in product development and prototyping for Hydroponics Africa.
 Development Credit Authority – The DCA supported by USAID provides critical
risk- absorption to the private sector through guarantees. As risk was an important
investment barrier in many cases, CSAI engaged the DCA on the possibility of providing
guarantees for supported companies.
 East Africa Trade and Investment Hub – The EATIH supported by USAID provides similar
incubation and acceleration support to businesses in East Africa. CSAI engaged EATIH in
order to match CSAI supported businesses to investors that work with the EATIH.
Page | 23
AID-OAA-A-16-00035
3.1.2. SCREENING OF PROMISING CSA BUSINESSES FOR PRIVATE

INVESTMENTS (WP ACTIVITY 1.2)
Development and application of effective screening tools for promising CSA business models, incubatees,
and investors was completed early in FY 17. The purpose of these tools was to help the team prioritize
outreach efforts within different CSA sub-sectors under WP 2 and 3. Over 50 enterprises have
been screened using the screening tools.
The CSA Business Model Screening Tool set the criteria for identifying the most viable
business models for CSA investment opportunities with a strong focus on three overarching
criteria: social and environmental benefits, market expansion potential, and investment viability.
These were further broken down to climate resilience; related risk management; and the potential for
increasing productivity, climate risk adjusted incomes for farmers, gender equality, and food
security. These criteria were chosen to ensure that identified models deliver against the
project's’ Key Performance Indicators (KPIs) and objectives and that the business models are
“bankable” (i.e., economically viable).
The CSA Incubatee Screening Tool assists in the identification of businesses that show evidence
of being viable, climate smart (separately weighed for contribution towards productivity gains,
enhanced resilience, and mitigation), inclusive, socially and politically feasible as well as good value for
money.
The CSA Investor Screening Tool is aimed at identifying the most promising investors in climate smart
agribusinesses in the target countries. The tool rates investors’ geographical and sector focus, track
record, ability to invest in CSA, availability of funds, preferred investment structures, expected returns,
and social and environmental management systems. Approximately 55 investors have been screened, of
which a prioritized list of investors were approached to present investment opportunities that CSAI has
developed or is developing.
The Project approved 32 enterprises to support. More enterprises were interested in receiving support,
but due to time and budget constraints, CSAI was unable to accommodate more than 32.
Page | 24
AID-OAA-A-16-00035
3.1.3. ORGANIZING A PUBLIC-PRIVATE DIALOGUE (WP ACTIVITY 1.3)

CSAI—in collaboration with the DFID funded FICCF program—organized a dialogue around barriers to
CSA investment in Nairobi in April 2017. The dialogue was attended by representatives from the public
and private sectors and civil society. CSAI presented the initial results of a barrier analysis to gather
stakeholder feedback and find common ground on possible solutions. Based on outcomes from
this dialogue, the issues of producer aggregation, CSA standardization and certification, and a lack of
fiscal incentives for CSA were prioritized.
In February 2018, CSAI held a second public-private dialogue, to discuss and present enabling
environment and identify policy interventions that could address barriers to investment in CSA in Kenya.
The dialogue was organized in collaboration with the DFID-funded FICCF program and the Kenya Climate
Innovation Center (KCIC). Attended by over 30 key stakeholders from the public and private sectors and
civil society, the dialogue focused on finding alignment on solutions to issues in the three prioritized
areas identified in the previous dialogue: producer aggregation, CSA standards and
certification, and fiscal incentives. An interactive exchange among key actors addressed possible
pathways to implementation through public and private sector action.
Building on the outcomes and findings of the dialogue, CSAI produced a series of Policy Briefs (see
Annex 6) to provide recommendations to public and private sector actors. These policy briefs were
shared with several audiences, including most notably Kenya’s National Climate Change Council, the
country’s central national coordination body of climate change, chaired by the President of Kenya.
The first five briefs develop specific recommendations for incorporating CSA consideration into policies
addressing each of the three prioritized issue areas (aggregation, standards and certification, and fiscal
incentives), including how these interventions could be promoted and adopted. These recommendations
can be further introduced into relevant dialogues at the national and regional level.
CSAI subsequently developed two additional briefs, taking a closer look at how the identified solutions
on standardization and certification, aggregation, and fiscal/financial incentives apply to two
important agricultural value chains that have strong potential to mitigate climate impacts while delivering
social impact and economic growth: dairy and cotton. Each case study presents the main challenges to
sustainable sector growth before issuing recommendations on possible public and private sector action.
Based on strong interest by stakeholder, and leveraging its business support to Lishabora (a dairy
feed producer utilizing digital technology), CSAI produced a brief on Information and Communication
Technology (ICT) applications in agricultural value chains. The brief identifies key challenges to ICT business
sustainability, then provides recommendations for improving the policy environment for ICT-in-agriculture
businesses, while expanding opportunities for impact-oriented private sector investment. Copies of the policy
briefs are included as annexes to this report.
Additionally, CSAI participated in and organized a few less formal events to improve public private dialogue
in Year 2. In May 2018, CSAI participated in the Africa CSA Forum, a two-day investment conference
held in Nairobi and organized by AID Forum. During the event, the program designed and led a one-hour
roundtable discussion focused on bridging the gap between investors and small CSA enterprises.
Page | 25
AID-OAA-A-16-00035
CSAI also organized and led two half-day events in Ethiopia and Kenya in June, bringing together
stakeholders from both the private and public sectors to discuss key challenges and solutions for increasing
investments. The Ethiopia Investment Dialogue held on June 19, 2018 in Ethiopia focused on an assessment
CSAI recently completed regarding country-specific investment challenges and included panel discussions.
3.2. Work Package 2

The following provides a summary of activities completed under Work Package 2: Incubation of innovative,
climate smart and inclusive businesses.
Page | 26
AID-OAA-A-16-00035
3.2.1. PORTFOLIO DEVELOPMENT (WP ACTIVITY 2.1)

Table 6. Subsectors for all agribusinesses under incubation in Year 2.
SECTOR ENTERPRISES
Agri-Processing  Biofit Feed Limited

 Ruhama Enterprise
 DryGro
 Menagesha Biotech Industry
 Amba Plc
 Shemu Plc
 Zayn Agro
 Farm Shop
Extensive Livestock & Fodder  Lucsom Limited
 Mara Beef Limited
Production
 Ol Pejeta Conservancy
 Hydroponics Africa
 Eor Ekule
 Rift Valley Hay Association
 Adazon
Cereals & Other Staples  Dry Land Seeds
 Elite Innovations Kenya Limited
 Transu
Dairy  Baringo Agricultural Marketing Service Cooperative Society
(BAMSCOS)
 Gogar Farm
 Biogas International Ltd
 Tarakwo Dairies Ltd
 Lisha Bora
Aquaculture  Victory Farms
 Lake View Fisheries
Forestry  Zamu Ltd
 Kofar
Horticulture  Selina Wamucii
 Eurofresh
 Meru Greens
Finance  Century Microfinance Bank
 Inuka Africa Microfinance
CSAI provided technical and financial support to the innovative, climate smart and inclusive businesses
identified in Work Package 1 to further develop their business and bring it to scale. The Project aimed
to have a diverse portfolio range in order to attract various investors who may be particularly focused in
certain sectors and investment levels. The incubated firms were at different stages of growth and
investment requirements, and represented a variety of sectors, including maize and other staples,
dairy, livestock feeds, aquaculture, horticulture, and beef.
Page | 27
AID-OAA-A-16-00035
3.2.2. INCUBATION (WP ACTIVITY 2.2)

CSAI’s incubation process is firm-specific and tailored to each firm’s identified capacity gaps and track
record. Some of the firms have existing shareholders and the potential to increase their
internal investment, while others are seeking an external source of debt and/or equity. Some of the
initial gaps identified are either downstream or upstream of the firm’s position in the value chain. The
incubation support is described in Table 7.
Table 7. Incubation Support
Type of Support Description of Support
Targeted technical SNV staff provide routine technical assistance and advisory
assistance/advisory services to all incubatees which includes brokering relationships
services and match making.
Outsourced research Specialist researchers contracted by CSAI to identify/test

opportunities for technology transfer. E.g. currently conducting
a survey and feasibility study to use alternative sources of
biomass for emergency feed for cattle during droughts
Short-term technical Contracting by CSAI of short-term consultants (i.e. for less than 4
assistance months) to work with incubatees on business strategy
development, feasibility studies, business plans, and/or other
technical services
Long term technical Contracting by CSAI of consultants to fill specific roles within the
assistance company for defined period of time to improve business
performance with the goal of the company ultimately investing in
this added resource
Co-financing Working with other donor programs with a common interest and
shared approach on specific issues and agreeing to a cost sharing
arrangement for the activity, e.g. trials of digestibility of
duckweed among cattle before commercializing the product
Training CSAI purchases entry for incubatee staff to attend and/or

directly pays vendors to host relevant training events
Internships CSAI contracts interns in short-term engagements while
incubatees fund other logistical expenses. Ideally the incubatee
will ultimately hire the intern once benefit is realized.
Incubation and acceleration activities included business advisory, investor matchmaking, preparation of
pitch decks including coaching on pitching to investors, business plan development & refinement,
outsourced research, short-term specialized research, long term business consultancy, co-financing of
specific activities and short-term training. Below is a summary of CSAI enterprises with brief reasons
why they were selected for support and progress made during the Project implementation.
Details on how CSAI supported each enterprise were provided in Year 2 Annual report and Annex 1.
Page | 28
AID-OAA-A-16-00035
3.2.3. MATCHMAKING BETWEEN INCUBATEES AND INVESTORS (WP ACTIVITY 2.3)

CSAI partnered with Intellecap Advisory Services, a global advisory firm with expertise in supporting and
scaling social enterprise ecosystems in South Asia and Sub Saharan Africa to support and expose
CSAI enterprises to capital advisory services as well as supporting in intermediating impact investment
capital. Intellecap has a network of investors who are brought together through the Sankalp Forum.
Sankalp is a powerful convening platform that annually brings together over 1,600 social enterprises,
impact investors, large corporations, governments, donors and DFIs at conferences in South Asia
and East Africa. The objective of Sankalp is to showcase promising social enterprises to impact
investors and drive dialogue around solutions to systemic barriers that hold back enterprises from
scale.
Intellecap in line with providing investor linkages to CSAI enterprises, scheduled an exclusive investor
session during the 5th Sankalp Africa Summit, held on March 1st and 2nd 2018 in Nairobi. CSAI enterprises
were given access to an exclusive speed dating session. The speed dating session offered participating
enterprises and investors an opportunity to have focused private introductory meetings in a compact
time frame. Five CSAI supported enterprises gained access to the Speed dating session where they were
able to meet and interact with at least three investors per enterprise. The session took a total of 1 ½
hours with enterprises getting to meet and discuss with an investor for 10 minutes each. Five
other CSAI enterprises were given access to an exclusive speed green pioneers showcase event
CSAI enterprises were offered the opportunity to pitch in front of 20 investors interested in
climate smart oriented enterprises. BioFit Agritech, a CSAI-support enterprise, was among the top 10
companies nominated for the Sankalp Award for its novel work in Kenya developing and testing low-cost
livestock feed made from water hyacinth.
Intellecap had engaged with BioFit Tech enterprises in investor interaction with a view of
facilitating investment closure, and provided support for Lake View Fisheries who was selected
to feature in Intellecap’s enterprise showcase in July 2018.
CSAI has facilitated DryGro to attend and pitch at the Cracking the Nut Conference, held in Guatemala
in June 2018, which provided significant exposure for DryGro to potential investors. DryGro is a
UK- based agriculture technology company that has developed new ways to grow animal feed
ingredients on arid, unproductive land. Using this technology, DryGro can grow feed ingredients
for aquaculture, ruminants and poultry at a lower cost than soy, fishmeal and other traditional inputs.
This technology can also grow on arid land using a fraction of the water of traditional agriculture,
making it a valuable climate change mitigation tool. This matters because the demand for feed ingredients
is growing faster than supply. In Kenya, protein feeds are expensive, poor quality, and face incremental
scarcity. DryGro can solve these problems through cost-effective, locally grown feed ingredients.
In addition to the matchmaking events, CSAI has scouted for possible investors for the various
enterprises most of whom were individual investors with interest in investing in various agricultural
subsectors.
3.3. Work Package 3

The following provides a summary of activities completed in Year 2 under Work Package 3:
Mobilization of private finance and public support for scalable investment models, broken down by activity.
Page | 29
AID-OAA-A-16-00035
3.3.1. IDENTIFICATION AND ENGAGEMENT OF INVESTORS (WP ACTIVITY 3.1)

To match prospective investees to appropriate investors, CSAI in Year 2 continued to engage with and
build up a diverse set of investors to meet the needs of CSAI clients. Using existing networks, referrals,
and conference attendance, CSAI initiated conversations with over 15 new investors during the project
period. Conferences, which included disseminating information to various investors on appropriate CSAI-
supported enterprises, included:
o Forum CSAI Public Private Dialogue - Nairobi, Kenya on February 8, 2018
o Sankalp Forum - Nairobi, Kenya on March 5-6, 2018
o International Finance Corporation (IFC) Agribusiness conference – Amsterdam,
Netherlands on May 15-16, 2018
o Africa CSA Summit - Nairobi, Kenya on May 15-16, 2018
o Global Landscape Forum Investment Forum – Washington, DC on May 29, 2018
o Innovate for Climate - Frankfurt, Germany on May 22-24, 2018
The investors identified diverse product types (e.g., equity, short-term debt, and long-term debt) and have
different investment criteria (e.g., sector, geographies, value-chain position, company size, and experience).
Understanding investors’ investment priorities has been a critical step for CSAI to properly
match investors with the diverse projects in the CSAI pipeline.
Page | 30
AID-OAA-A-16-00035
3.3.2. ESTABLISHING PARTNERSHIP AGREEMENTS WITH PRIVATE

INVESTORS (WP ACTIVITY 3.2)
Establishment of MOUs and collaboration agreements with investors has been an important tool
for formalizing and providing continuity to investor engagement. MOU establishes clear terms of
cooperation between CSAI and investor and align the investor objectives with the objectives and
timelines of CSAI. The Consortium has engaged with various associations, including the Kenya National
Farmer’s Federation and Kenya Association of Manufacturers to discover opportunities. CSAI
entered into a partnership agreement with Intellecap to support CSAI staff with enterprise coaching
materials and methodologies including preparation of pitching decks and conducting of mock pitches.
Intellecap also presented selected CSAI enterprises to its internal screening committee for scrutiny and
further facilitation support before presentation to Intellecap’s network of investors. Two enterprises
have been presented to the screening committee and received further facilitation.
CSAI also partnered with Kenya Climate Innovation Centre (KCIC) and Kenya Climate Ventures (KCV)
to mobilize and coach selected enterprises for participation in the Africa Sankalp event. Sankalp is a
global investor forum and offered and opportunity for CSAI to link the enterprises with a wide range of
investors.
Page | 31
AID-OAA-A-16-00035
3.3.3. DEVELOPMENT OF LIST OF INVESTMENT OPPORTUNITIES (WP ACTIVITY 3.3)

The table below indicates both new investors engaged during the project period, along with those
investors identified in the first year that were also engaged in Year 2.
Table 8. Investors Engaged

Investors Engaged Investors Engaged
(Engaged initially in Year 1)
Micro-Enterprises Support Programme Trust Century Microfinance Bank

(MESPT) Rabobank
FactorE Root Capital
Jihudi Kilimo Kenya Climate Venture Fund (KCV)
CoolCapFund Oikocredit
BioCarbon Group Kenya Climate Innovation Fund
Crossboundary (KCIC) Grofin
VentureWell Beyond Capital
MCE Social Capital Agricultural Finance Corporation (AFC)
Cooperative Bank of Kenya Responsibility
Rafiki Microfinance Institution Voxtra
Conservation International Ventures Fund Attraxx Group
Inuka Microfinance Institution Okavango Capital
USAID Development Credit Authority Stratera Capital
ABC Bank Open Capital Foundation
Soros Economic Development Fund ICDC
One Billion Lives Tony Elumelu Foundation
Irish Technozilla
Aid Rabo Bank Foundation
Norad AHL Venture Capital Partners
Page | 32
AID-OAA-A-16-00035
3.3.4. BUSINESS PLANS AND OTHER MATERIALS (WP ACTIVITY 3.4)

Development and review of key strategy documents, including business plans (BP), concept notes, and
pitch decks has been an important way for CSAI to support businesses in thinking through their
investment strategies and how to present themselves to interested investors. When necessary, CSAI
had done analysis in cooperation with the clients to help verify whether the underlying assumptions of a
business model are justifiable. CSAI assisted its enterprises to develop and fine tune a range of key
documents (Table 8), such as presentation of the business history and its management team, description
of the businesses’ market, history of pricing trends and pricing risk implications, businesses’
environmental and social policies, sensitivity analyses, and others depending on the needs of the
business.
Table 8. Support Provided to Enterprises
Material
Enterprise Description
Developed
Amba PLC – BP BP developed for Amba that has been submitted to a bank to support loan
BP application.
BioFit Feeds CSAI has supported Biofit in Business plan writing to help them in
Ltd BP, financial commercializing their business model. They have also been assisted to develop a
model financial model.
Biogas
International BP, financial CSAI has supported BIL to work on their business plan and financial model which
Ltd model has helped BIL to refine its business and funding requirements.
Mara Beef CSAI has facilitated Mara Beef to do a BP that will support MB management in its
BP fund raising activities. The main focus for MB is to carry out further meat
processing and value addition activities that will enable the business to grow.
Eor Ekule BP & CSAI supported Ekule to improve their existing business plan and develop a
concept concept note to attract investors.
Eurofresh BP, concept
CSAI helped Eurofresh to improve their existing business plan and developed a
note & loan
concept note to attract investors. Additionally, CSAI developed a proposed
repayment
repayment plan for a loan from MCE Social Capital to Eurofresh.
model
Inuka CSAI developed a concept note for Inuka to help them attract new investors.
Concept
note Inuka has also been supported to develop a website and create more presence in
the social media.
Ruhamah CSAI has supported Ruhamah come up with a business plan and develop a
BP
Enterprise website including improvement on branding and social media campaign.
RVHA Concept CSAI developed a concept note for RVHA to help them attract new investors.
note
Page | 33
AID-OAA-A-16-00035
Tarakwo Concept
CSAI developed a concept note for RVHA to help them attract new investors.
note
KOFAR Investor CSAI developed an investor pitch deck for KOFAR to help them attract new
pitch deck investors.
Elemtu Concept CSAI developed a concept note for Elemtu to help them attract new investors.
note
ZAMU Concept CSAI developed a feasibility study for ZAMU to assess the economic profitability
note and of the proposed investment.
Meru Concept
Greens CSAI developed a concept note for Meru to help them attract new investors.
note
Hydroponics Product CSAI supported Hydroponics Africa in the design and prototyping of a
Africa Design standardized hydroponics product for mass manufacturing.
Menagesha BP CSAI has facilitated MBI to do a BP that can clearly point out or project the
Biotech Ind growth of company by producing and distributing bio fertilizer for the next five
(MBI) year that will increase the accessibility of bio fertilizer to stallholder farmers.
Lishabora Teaser CSAI produced a short pitch that can be shared with investors
Zayn Agro Teaser CSAI produced a short pitch that can be shared with investors
Victory Solar PV CSAI developed design specifications for a solar PV installation and supported the
Farms design and company in developing its RfP for potential investors.
RfP
Page | 34
AID-OAA-A-16-00035
3.3.5. DEVELOP EARLY STATE ASSESSMENTS FOR SELECTED BUSINESSES (WP ACTIVITY
3.5)
Complementary to the business plans is the development of feasibility studies and analysis of the technical
and financial viability of investment opportunities. Feasibility studies tested the economic viability of
investments in order to give confidence to investors in the assumptions underlying investments’ financial
models. Pre-feasibility and feasibility studies were carried out for Eurofresh and ZAMU during year 2.
The analysis for Eurofresh centered on their ability to service an anticipated loan from MCE Social
Capital. The developed financial model shows when costs and revenues occur in order to demonstrate
when financing is needed and when it can be repaid.
The analysis for ZAMU focused on key input assumptions for the investment that impact its profitability.
The three assumptions were: productivity (in terms of mean annual increment), sawlog sale price, and
chipwood sale price. IRRs were developed for a number of scenarios under different assumptions, allowing
the project developers to understand under which conditions the investment can be sufficiently profitable.
Further, early stage assessments were conducted for Lishabora, Kiuit aka Zayn, and Sistema Biobolsa.
Page | 35
AID-OAA-A-16-00035
3.3.4. BUSINESSES SUPPORTING INVESTOR DUE DILIGENCE AND TRANSACTION TERM

SHEET (WP ACTIVITY 3.6)
The final stage in support of CSA businesses is working with businesses and investors to secure
investments; this stage is critical to the delivery of the activity’s key performance indicators (KPI). CSAI
supported conversations between enterprises and investors, as well as due diligence and term
sheet negotiation throughout the two years of the project’s implementation.
3.4. Investment Pipeline

There is a pipeline of potential investment opportunities that were not closed by the end date of
the project, but are likely to result in approved investments. The deals that are considered to be at
advanced and highly advanced stages are estimated to be worth USD 8.2M. These are deals where NDA’s
have been signed and sensitive financial documents shared for deeper due diligence processes,
doing business valuation and transaction sheets.
Page | 36
AID-OAA-A-16-00035
CONCLUSIONS
4.1. Prospects for Sustainability
The Consortium worked to establish a working relationship with similar programs working with
incubatees in Kenya, such as the Kenya Climate Innovation Centre (KCIC), Kenya Climate Ventures (KCV)
and Intellecap. CSAI shared its pipeline with these institutions with a clear understanding that some of
them will continue receiving TA ad investor linkage even after CSAI exit. In particular, Intellecap
has committed to support four of the CSAI enterprises with coaching materials and methodologies,
including preparation of pitching decks and conducting of mock pitches, and will be able to present
selected CSAI enterprises to its internal screening committee for scrutiny and further facilitation
support before presentation to its network of investors.
4.2.Recommendations
Taking into consideration the challenges to CSA impact investing in East Africa, as well as the CSAI
Activity accomplishments, implementation challenges and lessons learned, recommendations are grouped
into the three CSAI-related work packages:
Recommendations: Enabling Environment and Project Management
 engage government to enact and administer incentives for CSA Investments
 increase collaboration among donors and other investment support programs
 mainstream CSA approaches and innovations through public institutions
 curate a CSA investment information platform, easily accessible by all stakeholders
Early and on-going government engagement is critical to stimulating CSA investments and improving the
enabling environment for agricultural development in general. Targeted fiscal incentives and strengthened
regulatory policies can have multiplier effects throughout the value chain. Specific activities to promote
CSA investments include:
• develop a strategic roadmap to align financial sector policies with long-term investment standards
for CSA innovations
• target performance-driven public grants and guarantees for financial intermediaries to
encourage private sector CSA investment
• extend liabilities for climate and other environmental impacts, including application of the
‘polluter-pays principle’
• introduce tax credits and allowances to leverage private investment in energy efficiency and green
infrastructure, and encourage climate smart farming practices
• streamline bureaucratic procedures to harmonize business registration and reduce time and costs;
• explore use of green and impact bonds to mobilize private sector capital for CSA sector
With a relatively small pool of investment-ready CSA enterprises, improved collaboration
among investment support programs is needed to prevent duplicating efforts or financial resources to
the same business.
Page | 37
AID-OAA-A-16-00035
It is also important to mainstream CSA approaches and innovations through public institutions to address
knowledge gaps in public institutions and promote institutional synergies. CSA could be mainstreamed
into different levels of government with long-term educational programs and information services for all
stakeholders.
Recommendations: Incubation of CSA Enterprises
 focus capacity-building on key factors for investor decision-making
 develop an exit strategy for donor-funded investment support and facilitation
 improve aggregation to expand market access for CSA enterprises
Incubation and acceleration costs for early stage (i.e., higher risk) CSA enterprises are often subsidized
by public or donor initiatives, therefore transition from public to private provision of support and
facilitation can ensure sustainability. As part of its exit strategy, CSA investment programs should engage
a diversified range of private sector partners early in the design and implementation process. To
establish commercial rather than donor-oriented relationships, private providers can charge success or
performance-based fees to client CSA enterprises and/or investors.
Another recommendation concerns expansion of market access for CSA enterprises. Small-
scale agricultural and CSA enterprises lack access to larger markets/buyers which inhibits their
growth and attractiveness to investors. Aggregation models (e.g. agro-industrial parks, farmer
cooperatives or clusters, collection points, etc.) have been successfully used in Kenya and could
be adapted for CSA- related farmers. Corresponding long-term contracts with large-scale buyers,
including premium prices and/or guaranteed volume purchases, also provide incentives for farmer
participation and investment.
Recommendations: Acceleration and Mobilization of CSA Investments
 match expectations and needs of CSA enterprises and investors for mutual benefit
 encourage investors to expand pipelines to include a range of geographic and/or sector
focus areas
 incentivize and promote local investors and local expertise for CSA investments
 promote an array of finance (debt, equity, and grants) based on CSA enterprise needs
 assess the inclusion of private investors as program implementation partners
Various forms of finance should be available to match CSA enterprise needs and off-set risk during
various stages of growth (i.e., grants for innovation ideation, angel investments for prototyping, private
equity for expansion and growth, etc.). Although investment capital is readily available for
agribusinesses transitioning to commercial scale, for early stage CSA enterprises grants and patient
or concessionary capital is difficult to find.
Recommendations: BAA/Co-Creation Process Improvement:

 shorten co-creation timeframe
 clear timeline upfront for project planning
 clear materials explaining co-creation process
 allow teaming arrangements proposed by participants.
Page | 38

PA00TDV7

Uploaded by

Copyright:

Available Formats

You might also like

PA00TDV7

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PA00TDV7

Uploaded by

Copyright:

Available Formats

Feed the Future

1.1. ACTIVITY INFORMATION.......................................................................................................................... 2

2.1. CSAI STANDARD INDICATORS.................................................................................................................. 12

3.1. WORK PACKAGE 1............................................................................................................................... 20

4.1. PROSPECTS FOR SUSTAINABILITY.............................................................................................................. 36

Acronyms and Abbreviations

AFOLU Agriculture, Forestry, and Land Use (carbon calculator)

1.2. Executive Summary

1.3. Project Strategy and Climate Smart Agriculture Approach

Figure 1. Project Strategy to Develop an Inclusive CSA Market

Figure 2. Phased Project Approach

1.4. Summary of Major Accomplishments in Achieving Project Results

Number of new firms screened for

Total firms actively being incubated

Number of business plans, feasibility studies,

Dollar value of investment achieved $1,370,000

Investment pipeline at end of reporting

Projected GHG emission (CO2) reduced or

Number of agricultural enabling

1.4.1. ENABLING ENVIRONMENT FOR PRIVATE SECTOR CSA INVESTMENTS

1.4.2. COUNTRY SPECIFIC ACCOMPLISHMENTS:

1.4.3. SECTOR SPECIFIC ACCOMPLISHMENTS

Cereals & other

Chart 1: Sectors represented by CSAI enterprises

1.5. Major Challenges and Progress in Addressing Them

Problem Steps Taken Results Comments

MONITORING, EVALUATION & LEARNING

Projected greenhouse gas emissions reduced or avoided through

technologies related to landscapes and supported by USG assistance

Amount of investment mobilized (in USD) for climate change

EG 3.1- Number of agricultural enabling environment policies analyzed,

(CSOs) engaged in agricultural and food security related

Number of firms receiving USG funded technical assistance for

EG.3.2- Value of new private sector capital investment in the agriculture

Number of public-private dialogue events 3

Number of concept notes, business plans and feasibility studies

2.1. CSAI Standard Indicators

Ref. No Activity Planned or Target Actual Comments on Deviation

EG 3.1-12 Number of agricultural 5 5 These were mainly on

Ref. No Activity Planned or Target Actual Comments on Deviation

2.2. GHG Emissions Reduction

Theme 7 – Challenges in quantifying GHG impacts with the private sector

2.3.4. KNOWLEDGE SHARING EVENTS AND CHANNELS

CSAI Closeout Event, Nairobi, Kenya (June 2018):

2.3.5. KEY LEARNING PRODUCTS

Brief 2: Increasing CSA Investment through Fiscal Incentives

CSAI PROJECT IMPLEMENTATION

3.1.1. PROJECT MANAGEMENT (WP ACTIVITY 1.1)

b. Project Steering Committee

3.1.2. SCREENING OF PROMISING CSA BUSINESSES FOR PRIVATE

3.1.3. ORGANIZING A PUBLIC-PRIVATE DIALOGUE (WP ACTIVITY 1.3)

3.2. Work Package 2

3.2.1. PORTFOLIO DEVELOPMENT (WP ACTIVITY 2.1)

Agri-Processing  Biofit Feed Limited

3.2.2. INCUBATION (WP ACTIVITY 2.2)

Outsourced research Specialist researchers contracted by CSAI to identify/test

Training CSAI purchases entry for incubatee staff to attend and/or

3.2.3. MATCHMAKING BETWEEN INCUBATEES AND INVESTORS (WP ACTIVITY 2.3)