The Africa Enterprise Challenge Fund (AECF) is a leading development finance organisation that supports businesses to innovate, create jobs and leverage investments in order to create resilience and sustainable incomes in rural and marginalised communities in Africa. The AECF is a development institution which supports businesses to innovate, create jobs, leverage investments and markets in an effort to create resilience and sustainable incomes in rural and marginalized communities in Africa.
Launched in 2008, AECF has invested in 292 businesses across more than 40 value chains and 26 countries in sub-Saharan Africa. Launched in 2008, the AECF has mobilized over US $310 million to date, leveraging more than US $580 million in matching capital and improving the lives of more than 13 million people in 2016 alone through jobs and increased household incomes. In the new 2018-2020 strategy, their goal is to “double their impact in half the time”.
AECF focuses specifically on agribusiness, renewable energy and climate technologies, while also addressing the cross-cutting themes of gender, youth and fragile contexts. The Africa Enterprise Challenge Fund (AECF) is a special partnership initiative of the Alliance for a Green Revolution in Africa (AGRA). AECF is headquartered in Kenya, with offices in Côte d'Ivoire and Tanzania.
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KPMG International Development Advisory Services (IDAS) was the Fund Manager for the AECF (now managed by AECF Limited) from 2008 -2017. During this time, the AECF grew from US $35 million Fund to a large entity managing a portfolio of US $244 million in funds from multiple donors, and the number of projects from a mere 28 projects to 257 projects funded as at December 2016. By providing grants and non-recourse loans to projects focused on agriculture, renewable energy and adaptation to climate change and access to financial services, the Fund generated innovative and profitable ways of improving how markets work for the rural poor.
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Funding Opportunities and Application Process
The AECF makes its funding available through competitions. Private sector companies are invited to compete for AECF funds by submitting their new and innovative business ideas to a particular AECF competition. These ideas have to comply with the rules (eligibility and selection criteria) of the particular competition being applied for.
Challenge Funds are a mechanism for allocating and disbursing funds efficiently and fairly. Organizations are invited to bid for scarce resources. Rules are set and publicized, covering eligibility, the bidding process and the way that bids will be evaluated. The challenge fund process is a mechanism for allocating and disbursing public funds efficiently and fairly.
Organizations are invited to bid for scarce resources, unlike a tender but where what counts is the quality of the response, not price. The intention is to get funds to the organizations that truly need them and can use them effectively to realize the broader aims of public policy; and to do this transparently.
The AECF runs competitions open only to for-profit private companies that are starting, or intend to start, new ventures in specific fields. AECF offers Funding Windows targeted at specific economic sectors (including research-based agribusiness, renewable energy and rural financial services), at specific countries (including Zimbabwe and Tanzania and South Sudan) or at development corridors involving several countries.
Kakuma Kalobeyei Challenge Fund (KKCF)
Innovative businesses and social enterprises from around the world are invited to submit proposals for private sector projects at Kakuma, home to roughly 300,000 people of different nationalities, almost 200,000 of whom are refugees and asylum seekers. The competition is open to entrants in all sectors but with a focus on renewable energy, agribusiness, and financial services for private firms. The competition is being implemented through the IFC/AECF Kakuma Kalobeyei Challenge Fund (KKCF).
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The five-year, $25 million KKCF initiative is jointly implemented by IFC and AECF, in partnership with UNHCR and the Turkana County Government, and is supported by the European Union, KfW, SDC, FCDO and the Government of the Netherlands. Webinars will be held with applicants to answer all technical questions.
Victoria Sabula, AECF Chief Executive Officer, said, "We are very happy at AECF to be a partner to this innovative program that will bring new opportunities to people in Kakuma. AECF is dedicated to supporting businesses in places that are seen as riskier for commercial investors." Jumoke Jagun-Dokunmu, IFC Regional Director for Eastern Africa, said, "Refugees rely on humanitarian aid for immediate support, but the private sector has an important role to play providing longer-term development solutions and opportunities." H.E, Honorable Josphat Koli Nanok, Governor of Turkana County, said, "Turkana County's emphasis is to create opportunities and a conducive environment so that private sector investment will benefit both refugees and the local community. At least 3 percent of GDP in Turkana comes from refugees, underscoring the economic strength and opportunities there."
About IFC
IFC-a member of the World Bank Group-is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity.
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