ARAF Secures $90 Million for Fund Two to Scale Climate-Resilient Agribusiness Across Africa

The Acumen Resilient Agriculture Fund (ARAF) has secured an additional $90 million in committed capital to scale climate-resilient agribusinesses across East, West, and North Africa. This fresh commitment builds on ARAF Fund One, which launched in 2020 as a pioneering $58 million vehicle and the world’s first equity fund structured specifically for smallholder climate adaptation. Backed by a high-caliber coalition of development finance institutions (DFIs) and institutional allocators, ARAF targets the systemic undercapitalization of early-growth agricultural enterprises that act as the backbone for the continent’s food security.

ARAF uses blended capital to catalyze commercial investment, a mechanism the Green Climate Fund (GCF) notes “has demonstrated how blended finance can mobilize private capital for climate-resilient agriculture.” Anchor commitments are driven by returning partners, including the GCF, the Dutch Entrepreneurial Development Bank (FMO), and the French DFI Proparco – all of which backed ARAF Fund One from inception. These anchors are joined by new institutional allocators, including Swedfund, the Belgian Investment Company for Developing Countries (BIO), the Financing for Agricultural Smallholders in Africa (FASA) scheme, and a private family office.

Smallholder farmers produce nearly 80% of Africa’s food supply, yet traditional banking networks and standard private equity funds routinely allocate less than 5% of formal credit to agriculture, citing erratic climate patterns, fragmented supply chains, and lack of collateral. ARAF addresses this capitalization gap by deploying equity capital directly into scalable agribusinesses, proving that smallholder climate adaptation is an investable commercial thesis capable of yielding aligned financial returns while stabilizing local food economies.

Agribusinesses across African markets frequently face a “missing middle” financing gap – too large for microfinance, yet too small or operational-heavy for traditional commercial banks. By filling this gap with flexible equity and quasi-equity instruments, the fund provides target companies with the long-term balance sheet stability required to scale infrastructure, secure inputs, embed agronomic training, and guarantee off-take agreements for primary producers.

ARAF’s pipeline strategy prioritizes fast-growing, scalable food and agribusinesses whose core models directly mitigate climate shocks like prolonged drought and volatile rainfall. Building on the operational track record of ARAF Fund One, which deployed capital across 12 portfolio companies to reach over 3 million smallholders across East and West Africa, the fund’s expanded mandate includes a strategic entry into North African markets. ARAF Fund Two targets an additional 4 million smallholder farmers, selecting enterprises capable of driving measurable yield enhancements and localized income stabilization through institutionalized, climate-smart delivery systems.