Private Sector Window

The Private Sector Window (PrSW) is implemented and managed by International Finance Corporation (IFC) to provide innovative financing aimed at increasing the commercial potential of small and medium-sized agri-businesses and farmers by connecting them with local, national, and global value chains. It focuses on the following areas:

Increasing productivity: By connecting smallholders with credit, it enables them to expand and leverage economies of scale to increase agricultural yield.
Supporting innovation: The PrSW aims to support companies that develop technology and processes that increase productivity and lower use of water resources and inputs such as fertilizers.
Reducing risks: The PrSW will launch financial products such as first loss cover and weather insurance to manage these risks. It will also invest in micro, small, and medium-sized enterprises (MSMEs) funds to increase their ability to invest in MSMEs in riskier sectors that cannot attract investment capital through traditional channels.

The GAFSP Private Sector Window will add value to current multilateral efforts in agriculture and food security through its focus on smallholder farmers and MSMEs. Also, it will crowd-in private sector investment funding by supporting projects with a different risk/return profile. The Private Sector Window will source proposals from private sector firms during open, competitive Calls for Proposals for financing for private sponsors and MDBs and from the IFC's own pipeline.

Types of Financing

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GAFSP PrSW offers financing across the capital structure in agribusiness firms along the value chain, as well as advisory services alongside investments, focusing on MSMEs in IDA countries. The main types of financing include:

Long Term and Short Term Loans: Local intermediaries and agribusinesses will be able to apply for debt financing from PrSW to onlend to smallholders, farmers, and MSMEs. Businesses of this size typically have difficulty attracting commercial financing, thus hampering their ability to finance crops and invest in expansion.
Equity Capital: Availability of equity capital will strengthen the agribusiness supply chain and reach out to MSMEs in the following sectors: logistics, distribution, food production and processing, as well as agri-related infrastructure.
First Loss Cover: As part of an investment, the facility may choose to also provide first loss cover for loans taken out by smallholder farmers or SMEs, making them more attractive as borrowers to financial intermediaries.
Advisory Service: When warranted, investments are complemented with advisory services for increasing access to agriculture finance, improving farmer productivity, standards and market links, reducing risks, and mitigating climate change effects.

Eligibility for Funding

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Three main criteria guide investment decisions:

Country Need: The window is open to private sector firms and financial institutions operating in IDA-only countries, limiting GAFSP to countries with some of the lowest income per capita. Firms outside of IDA-only countries with a compelling case may be considered for funding in consultation with donors.
Use of Funding: Financing must be used for the expansion of activities related to strengthening smallholder-based supply chains, agribusiness, food and beverage production and processing and related infrastructure facilities.
Development Impact: Investments will enhance agricultural productivity and increase incomes of smallholder farmers.

The GAFSP Private Sector Window is currently reviewing proposals received during the Second Public Call for Proposals. Project sponsors should expect to be contacted with initial feedback on the proposals before March 30, 2013.

Key Documents

Private Sector Window Brochure (April 2012) (pdf)

Press Release on Private Sector Window (IFC, October 8, 2010)

Private Sector

Countries in which GAFSP is active:

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Private Sector Window

Types of Financing

Eligibility for Funding

Key Documents