Moringa backs Kenyan agroforestry business with $6mln
The Moringa Partnership, an impact investor, is making its second deal in Africa, backing Asante Capital EPZ, a Kenyan agroforestry business founded in 2015, with $6 million. The size of the stake and other terms of the deal were not disclosed.
The fresh capital will help Asante scale its operations to support its expansion plans. The firm develops tree plantations and tropical crops, and an initial $3 million of the investment will be used to support the development of a plywood industry in the East African country as well as kick-start the production of essential oils and food products.
The company sells its sustainably produced wood and agricultural products to both the domestic and regional markets, which are expected to continue growing significantly. Further afield, the company intends to target the Middle Eastern and Asian markets, where it has identified large deficits in these market sectors. In addition, global demand for the essential oils produced from some of the tropical crops produced by Asante has grown tremendously, offering the company considerable additional market opportunity.
Asante, which is led by an experienced team, is developing 300 hectares of plantations and has 225 farmers involved in its sustainable agriculture program. With financial profitability and social benefits forming the core of the company’s mission, the investment was an attractive one for Moringa.
“Agroforestry allows us to achieve three main objectives: agricultural, climatic and financial,” said Hervé Bourguignon, Moringa’s President. “We will participate in the creation and consolidation of a network of more than 500 smallholders, which will enable the reforestation of more than 2,800 hectares of plantations, with a significant carbon capture. The agricultural sector in Africa employs more than 60% of rural Africans. The project is therefore a strategic measure to start the development of the continent on an inclusive and sustainable basis.”