*NEW DEADLINE: March 22 2024, 23:59 EST*
The United Nations Capital Development Fund (UNCDF)
The United Nations Capital Development Fund (UNCDF) is the United Nations' flagship catalytic financing entity for the world’s Least Developed Countries (LDCs). With its unique capital mandate and focus on the LDCs, UNCDF works to invest and catalyze capital to support these countries in achieving the sustainable growth and inclusiveness envisioned by the 2030 Agenda for Sustainable Development and the Doha Programme of Action for the least developed countries, 2022–2031. UNCDF builds partnerships with other UN organizations, as well as private and public sector actors, to achieve greater impact in development; specifically, by unlocking additional resources and strengthening financing mechanisms and systems contributing to transformation pathways, focusing on such development themes as green economy, digitalization, urbanization, inclusive economies, gender equality and women’s economic empowerment.
To deliver the actions necessary to fulfil the targets outlined in the Global Biodiversity Framework, UNCDF has established a nature-based financing service line – the Nature Asset Team (NAT). In collaboration with UN agencies, national and international governments, private sector institutions and other key partners, NAT works to strengthen institutional capacities, catalyze resource flows, and improve access to technical expertise, thereby creating the context for sustained investment in nature assets and long-term distribution of co-benefits.
The Africa Adaptation Initiative (AAI)
The Africa Adaptation Initiative (AAI) was launched at COP 21 in Paris as an African-led initiative to ensure that the continent urgently adapts to the adverse impacts of climate change in the short, medium, and longer terms. As an African-led initiative, AAI is mandated to lead climate change adaptation efforts, in full recognition of the African’s development priorities articulated in the agenda 2063, the blueprint and master plan for transforming the continent. The AAI’s mission is to: (i) Raise awareness of climate adaptation; (ii) Facilitate knowledge management, capacity building, and capacity-strengthening; (iii) Support and facilitate resource mobilization for implementation; (iv) Promote cooperation and partnerships (at sub-regional and regional levels) for synergy, scale and maximize shared benefits; (v) Track progress through monitoring and evaluation of an action. To achieve this mission, AAI is developing and implementing multiple large scale adaptation projects to benefit the entirety of the African continent.
Sustainable Solutions for Africa (SSA)
Sustainable Solutions for Africa (SSA) is a non-profit organization created in 2021 as the first branch of the Irish group Climate Solutions and Investments Africa (CSIA) committed to mobilizing resources and finding innovative solutions for the fight against climate change in developing countries. SSA is specialized in consulting and capacity building; support for public and private states and institutions in the mobilization of resources and financing as well as the identification of technological solutions.
SSA will serve as the Technical Partner of the AAI Food Security Accelerator. The Technical Partner, based in Africa, will support in sourcing new solutions and opportunities, and advise on new trends in adaptation innovation. The Technical Partner will also support facilitating investment into the deals, structure co-financing deals from Global Funds, and provide Technical Assistance and impact monitoring in line with adaptation indicators. The Technical Partner may also mobilize additional financing.
The AAI Food Security Accelerator (FSA)
The AAI Food Security Accelerator (FSA), an initiative strategically designed by the Africa Adaptation Initiative and in collaboration with the U.S. Department of State, invests in climate-adaptive food system solutions, with a particular emphasis on nature-positive, adaptation-centric businesses in Africa's emerging and frontier markets.
This Request for Applications (RfA) seeks to identify high-potential businesses (especially micro, small, and medium enterprises (MSMEs)) that the FSA can support to implement and scale up nature-positive adaptation solutions for Africa’s food systems.
UNCDF has the mandate to support the implementation of the AAI Food Security Accelerator (FSA) Programme in Africa. The FSA is purpose-built to invest in climate-adaptive food systems solutions, specifically nature-positive and gender-sensitive adaptation focused businesses. The targeted investments in climate-adaptive food system solutions will be channeled through two avenues:
Avenue 1 – Direct Investments window:
To enhance adaptation and resilience of African food systems, the AAI Food Security Accelerator will directly invest in food systems innovations with the focus on gender-responsive and climate-resilient solutions. Locally registered businesses can apply for financing in the form of reimbursable grant, concessional/flexible loans, convertible debt, and guarantee, ranging from USD 125K to USD 500K.
Notionally, 15-20 businesses across 20 priority countries in Africa are expected to be awarded.
Avenue 2 – Fund to Funds window for investments in African investment funds’ portfolio:
To advance locally led sustainable economic transitions, the AAI Food Security Accelerator will provide concessional funding to de-risk portfolios of African investment funds committed to advancing food security, climate adaptation, nature conservation, and gender equity in entrepreneurship. Local investment vehicles with a consolidated pipeline representing a portfolio of African investment funds can apply for funding ranging from USD 250K to USD 1 million, in the form of quasi-equity, subordinated debt, and other financial solutions. This funding window aims to aggregate a substantial number of investments into local businesses, potentially impacting 15-20 SMEs across 10 priority countries.
Scope: All African companies with headquarters on the African continent are eligible.
Period: 2023-2028
Budget: From USD 125,000 up to USD 500,000 for direct investments in businesses and from USD 250,000 up to USD 1,000,000 for Fund to Funds interventions (investments in African investment funds’ pipeline) for each selected case.
Available financial instruments: available financial instruments differ per window. Below, the available financial instruments are listed per window, including a short description per instrument.
Avenue 1 – the Direct Investments window: this first window includes four main financial instruments. Applicants can apply for one or multiple financial instruments that fit their support needs.
- Reimbursable Grant is an interest-free financial provision to be given as a lump sum, primarily intended for identified activities that hold the potential for revenue generation. The reimbursable grant will be tailored for scenarios where there is ambiguity regarding the precise revenue amount or its realization timeline during the project or programme's formulation stage. Recipients are obligated to repay the grant at the conclusion of the financing period, excluding predefined instances of default.
- Concessional/Flexible Loans are loans that will offer debt financing with terms more favorable than typical market conditions. Such loans will have combination of features, such as reduced interest rates, waived or reduced negotiation fees, simplified security requirements, extended repayment schedules, subordination terms, grace periods, specific project finance covenants, and the potential for interest rate adjustments throughout the loan's duration.
- Convertible Debt is an unsecured debt or note (debenture) that can be converted into equity, typically preferred shares, either at a predetermined financing event or at the end of the debt's tenor. The conversion serves as an alternative to repaying the principal along with the accrued interest. If the borrower fails to fully repay the obligations, the outstanding balance will be converted into equity, potentially at a conversion discount or subject to a valuation cap. Such debt will be issued subject to UNCDF’s rules and regulations (see relevant clauses below on hybrid financial instruments and UNCDF’s capital mandate).
- Guarantee is a financial instrument that provides security to lenders and investors against a borrower's failure to repay due to certain predefined events. The FSA will provide either a minimum guarantee (protecting a segment of a third-party investment throughout its duration) or a back-end guarantee (covering the complete third-party investment after a specified period) in case of default.
Note: FSA will offer technical assistance, equivalent to non-reimbursable grants, to all participants and provide additional technical assistance services upon special requests, aiming to amplify the impact and co-benefits for businesses with significant impact and scalability potential in food security.
Avenue 2 – Fund to Funds window for investments in African investment funds’ portfolio: this second window includes three main hybrid financial instruments. Applicants can apply for one or multiple financial instruments that fit their support needs.
- Quasi-Equity Investment (Via Eligible Third Party) encompasses characteristics of both debt and equity, especially in terms of ownership and asset claims in the event of default. The risk-return profile of quasi-equity investments typically falls between debt and equity, aiming to de-risk the investment platform's capital structure. In some situations, this financial instrument will incorporate conversion features that can be activated by events such as default, breach, or the achievement of specified milestones.
- Subordinated Debt is a concessional debt that in the event of a project default will be repaid after all other "senior" debt has been settled in full. It serves as a de-risking mechanism, enhancing the capital structure and making credit risk assessment more favorable for potential investors.
- Other Financial Solutions will incorporate alternative of strategies and tools aimed at de-risking investment vehicles, thus facilitating the mobilization of blended finance for Food Systems Solutions in Africa.
Note on UNCDF’s capital mandate: Quasi-equity or equity-like hybrid financial instruments will be deployed to qualified applicants through eligible third parties with support from UNCDF. As a general rule, UNCDF’s capital mandate is limited to direct investments through grants, concessional debt, and guarantees only.
Eligible candidates: Applications will be accepted from companies that are currently implementing and/or aiming to implement nature-positive and gender-responsive adaptation innovation solutions that support creating resilient agri-food systems as part of their business models, as well as African Investment Funds with a pipeline of such companies. Applicants may apply independently or in a consortium, provided that the consortium has a pre-established partnership prior to when this request for applications was issued.
Applicants are allowed to apply for a combination capacity building and technical assistance with most relevant eligible instruments as listed above.
For queries write to xxx cc uncdf.rfa@uncdf.org
Please submit your proposal trough this e-investment platform. Submissions using other templates or sent by other electronic or non electronic means will not be eligible.
For more information please download the following documents:
240105 - NAT - AAI Food Security Accelerator in Africa: Direct and Portfolio-level Investments in Innovative & Resilient Food Systems Solutions
*NEW DEADLINE: March 22 2024, 23:59 EST*
The United Nations Capital Development Fund (UNCDF)
The United Nations Capital Development Fund (UNCDF) is the United Nations' flagship catalytic financing entity for the world’s Least Developed Countries (LDCs). With its unique capital mandate and focus on the LDCs, UNCDF works to invest and catalyze capital to support these countries in achieving the sustainable growth and inclusiveness envisioned by the 2030 Agenda for Sustainable Development and the Doha Programme of Action for the least developed countries, 2022–2031. UNCDF builds partnerships with other UN organizations, as well as private and public sector actors, to achieve greater impact in development; specifically, by unlocking additional resources and strengthening financing mechanisms and systems contributing to transformation pathways, focusing on such development themes as green economy, digitalization, urbanization, inclusive economies, gender equality and women’s economic empowerment.
To deliver the actions necessary to fulfil the targets outlined in the Global Biodiversity Framework, UNCDF has established a nature-based financing service line – the Nature Asset Team (NAT). In collaboration with UN agencies, national and international governments, private sector institutions and other key partners, NAT works to strengthen institutional capacities, catalyze resource flows, and improve access to technical expertise, thereby creating the context for sustained investment in nature assets and long-term distribution of co-benefits.
The Africa Adaptation Initiative (AAI)
The Africa Adaptation Initiative (AAI) was launched at COP 21 in Paris as an African-led initiative to ensure that the continent urgently adapts to the adverse impacts of climate change in the short, medium, and longer terms. As an African-led initiative, AAI is mandated to lead climate change adaptation efforts, in full recognition of the African’s development priorities articulated in the agenda 2063, the blueprint and master plan for transforming the continent. The AAI’s mission is to: (i) Raise awareness of climate adaptation; (ii) Facilitate knowledge management, capacity building, and capacity-strengthening; (iii) Support and facilitate resource mobilization for implementation; (iv) Promote cooperation and partnerships (at sub-regional and regional levels) for synergy, scale and maximize shared benefits; (v) Track progress through monitoring and evaluation of an action. To achieve this mission, AAI is developing and implementing multiple large scale adaptation projects to benefit the entirety of the African continent.
Sustainable Solutions for Africa (SSA)
Sustainable Solutions for Africa (SSA) is a non-profit organization created in 2021 as the first branch of the Irish group Climate Solutions and Investments Africa (CSIA) committed to mobilizing resources and finding innovative solutions for the fight against climate change in developing countries. SSA is specialized in consulting and capacity building; support for public and private states and institutions in the mobilization of resources and financing as well as the identification of technological solutions.
SSA will serve as the Technical Partner of the AAI Food Security Accelerator. The Technical Partner, based in Africa, will support in sourcing new solutions and opportunities, and advise on new trends in adaptation innovation. The Technical Partner will also support facilitating investment into the deals, structure co-financing deals from Global Funds, and provide Technical Assistance and impact monitoring in line with adaptation indicators. The Technical Partner may also mobilize additional financing.
The AAI Food Security Accelerator (FSA)
The AAI Food Security Accelerator (FSA), an initiative strategically designed by the Africa Adaptation Initiative and in collaboration with the U.S. Department of State, invests in climate-adaptive food system solutions, with a particular emphasis on nature-positive, adaptation-centric businesses in Africa's emerging and frontier markets.
This Request for Applications (RfA) seeks to identify high-potential businesses (especially micro, small, and medium enterprises (MSMEs)) that the FSA can support to implement and scale up nature-positive adaptation solutions for Africa’s food systems.
UNCDF has the mandate to support the implementation of the AAI Food Security Accelerator (FSA) Programme in Africa. The FSA is purpose-built to invest in climate-adaptive food systems solutions, specifically nature-positive and gender-sensitive adaptation focused businesses. The targeted investments in climate-adaptive food system solutions will be channeled through two avenues:
Avenue 1 – Direct Investments window:
To enhance adaptation and resilience of African food systems, the AAI Food Security Accelerator will directly invest in food systems innovations with the focus on gender-responsive and climate-resilient solutions. Locally registered businesses can apply for financing in the form of reimbursable grant, concessional/flexible loans, convertible debt, and guarantee, ranging from USD 125K to USD 500K.
Notionally, 15-20 businesses across 20 priority countries in Africa are expected to be awarded.
Avenue 2 – Fund to Funds window for investments in African investment funds’ portfolio:
To advance locally led sustainable economic transitions, the AAI Food Security Accelerator will provide concessional funding to de-risk portfolios of African investment funds committed to advancing food security, climate adaptation, nature conservation, and gender equity in entrepreneurship. Local investment vehicles with a consolidated pipeline representing a portfolio of African investment funds can apply for funding ranging from USD 250K to USD 1 million, in the form of quasi-equity, subordinated debt, and other financial solutions. This funding window aims to aggregate a substantial number of investments into local businesses, potentially impacting 15-20 SMEs across 10 priority countries.
Scope: All African companies with headquarters on the African continent are eligible.
Period: 2023-2028
Budget: From USD 125,000 up to USD 500,000 for direct investments in businesses and from USD 250,000 up to USD 1,000,000 for Fund to Funds interventions (investments in African investment funds’ pipeline) for each selected case.
Available financial instruments: available financial instruments differ per window. Below, the available financial instruments are listed per window, including a short description per instrument.
Avenue 1 – the Direct Investments window: this first window includes four main financial instruments. Applicants can apply for one or multiple financial instruments that fit their support needs.
- Reimbursable Grant is an interest-free financial provision to be given as a lump sum, primarily intended for identified activities that hold the potential for revenue generation. The reimbursable grant will be tailored for scenarios where there is ambiguity regarding the precise revenue amount or its realization timeline during the project or programme's formulation stage. Recipients are obligated to repay the grant at the conclusion of the financing period, excluding predefined instances of default.
- Concessional/Flexible Loans are loans that will offer debt financing with terms more favorable than typical market conditions. Such loans will have combination of features, such as reduced interest rates, waived or reduced negotiation fees, simplified security requirements, extended repayment schedules, subordination terms, grace periods, specific project finance covenants, and the potential for interest rate adjustments throughout the loan's duration.
- Convertible Debt is an unsecured debt or note (debenture) that can be converted into equity, typically preferred shares, either at a predetermined financing event or at the end of the debt's tenor. The conversion serves as an alternative to repaying the principal along with the accrued interest. If the borrower fails to fully repay the obligations, the outstanding balance will be converted into equity, potentially at a conversion discount or subject to a valuation cap. Such debt will be issued subject to UNCDF’s rules and regulations (see relevant clauses below on hybrid financial instruments and UNCDF’s capital mandate).
- Guarantee is a financial instrument that provides security to lenders and investors against a borrower's failure to repay due to certain predefined events. The FSA will provide either a minimum guarantee (protecting a segment of a third-party investment throughout its duration) or a back-end guarantee (covering the complete third-party investment after a specified period) in case of default.
Note: FSA will offer technical assistance, equivalent to non-reimbursable grants, to all participants and provide additional technical assistance services upon special requests, aiming to amplify the impact and co-benefits for businesses with significant impact and scalability potential in food security.
Avenue 2 – Fund to Funds window for investments in African investment funds’ portfolio: this second window includes three main hybrid financial instruments. Applicants can apply for one or multiple financial instruments that fit their support needs.
- Quasi-Equity Investment (Via Eligible Third Party) encompasses characteristics of both debt and equity, especially in terms of ownership and asset claims in the event of default. The risk-return profile of quasi-equity investments typically falls between debt and equity, aiming to de-risk the investment platform's capital structure. In some situations, this financial instrument will incorporate conversion features that can be activated by events such as default, breach, or the achievement of specified milestones.
- Subordinated Debt is a concessional debt that in the event of a project default will be repaid after all other "senior" debt has been settled in full. It serves as a de-risking mechanism, enhancing the capital structure and making credit risk assessment more favorable for potential investors.
- Other Financial Solutions will incorporate alternative of strategies and tools aimed at de-risking investment vehicles, thus facilitating the mobilization of blended finance for Food Systems Solutions in Africa.
Note on UNCDF’s capital mandate: Quasi-equity or equity-like hybrid financial instruments will be deployed to qualified applicants through eligible third parties with support from UNCDF. As a general rule, UNCDF’s capital mandate is limited to direct investments through grants, concessional debt, and guarantees only.
Eligible candidates: Applications will be accepted from companies that are currently implementing and/or aiming to implement nature-positive and gender-responsive adaptation innovation solutions that support creating resilient agri-food systems as part of their business models, as well as African Investment Funds with a pipeline of such companies. Applicants may apply independently or in a consortium, provided that the consortium has a pre-established partnership prior to when this request for applications was issued.
Applicants are allowed to apply for a combination capacity building and technical assistance with most relevant eligible instruments as listed above.
For queries write to xxx cc uncdf.rfa@uncdf.org
Please submit your proposal trough this e-investment platform. Submissions using other templates or sent by other electronic or non electronic means will not be eligible.
For more information please download the following documents: