Aid on Spreadsheets

aBi Trust Uganda 2015-2018 - aBi Trust 2015-2018

The proposed decision refers to continued Swedish support to the Agricultural Business Initiative Uganda (aBi) Trust corresponding to SEK 40 million during the period 2015-2018. Financial support should be seen as a core support to aBi Trust for implementation in accordance with the business plan and budget for 2014-2018. aBi Trust aims overall to strengthen Uganda's competitiveness, and hence economic growth through increased productivity and value addition in the agriculture sector. Agriculture has untapped potential and is still the sector that employs most people in Uganda, particularly in rural areas. aBi Trust aims at reducing what is considered to be specific barriers/risks for the development of farming as a business (i.e. transition from subsistence to more commercial farming) through capacity development and access to financial resources and services that focus on the entire value chain in a number of prioritized commodities. Implementation is done through collaboration with private sector actors (companies and financial institutions), which in turn reaches out to the lower production levels (farmers and households). aBi Trust will serve as implementing partner but Sweden will sign a so-called Agreement on Delegated Cooperation with Denmark in accordance with the principles of development effectiveness and donor coordination. The agreement has been negotiated in close collaboration with Sida's legal department and implies that the overall responsibility for monitor and follow-up will be delegated to Denmark. In relation to Sida's Rule on Contribution Management, there will be an exemption related to repayment of accrued interest to Sweden. Following the agreement, any income from accrued interest will be kept by aBi Trust, as part of the Swedish financial contribution. The Agribusiness Initiative Uganda consists of two different “legs”. aBi Trust that contributes to capacity development and access to finance and financial services to the actors in specific value chains and aBi Finance, which is an equity fund. The proposed decision includes only support for aBi Trust. In order to further strengthen the conditions for long-term financing of aBi Trust and to trigger development of more innovative financial products for increased lending and risk-taking among financial institutions, Sweden intends to initiate discussions on possible support for aBi Finance. Sweden participated very actively when the aBi Trust initiative was developed and contributed with SEK 45 million during the period 2010-2013 (ref. UF2009 / 3764). The previous cooperation with aBi Trust has been good, and the Embassy is recognizing the good results achieved. aBi has managed to reach out to a large number of beneficiaries and evaluations (including control groups) indicate that the program has contributed to higher income generation and more productive jobs in the agriculture sector. This is a consequence of better utilization of land and improved access to markets and agricultural capital. Previous experiences justify continued Swedish support. During the appraisal, the Embassy commissioned an external review to assess aBi Trust's financial control environment (call-off against the Embassy framework agreement for audit services). Following the general recommendations from this desktop review, it is concluded that Sweden is able to continue allocating financial support to aBi Trust. Important however to recognize the weaknesses identified, which need to be further assessed and followed-up during implementation. See also 2.2 below and further clarified in the risk register.

The overall objective of aBi is to strengthen the competitiveness of Uganda's Agricultural and Agro Processing Sectors. aBi is composed of two separate but complementary legal entities, aBi Trust and aBi finance. It is a multi-stakeholder organisation co-founded by Government of Uganda and Denmark. Sida's support to aBi Trust is set to deliver on one of three components of Denmark's U-growth programme. The component is called Agribusiness initiative and aims at supporting private agribusiness development in ways that will help achieve the objectives of the Government's Competitiveness and Investment climate Strategy (CICS). The mandate of aBi trust is to support private sector actors in selected value chains to increase their contribution to the agriculture sector by strengthening the productivity of land and labour as well as market competitiveness. The business plan states the ambition for aBi to be a vehicle for agricultural transformation. Success in doing so will contribute to poverty reduction through economic growth, wealth creation, and increased employment opportunities. Constraints affecting agribusiness development in selected value chains are identified by aBi Trust. They include, among others, low quality inputs, limited adoption of technologies, few market linkages, limited access to finance and low quality of produce. Activities to address these constraints are implemented, such as training in good economic practices , puality improvements through provision off training equipment, value addition, improved inputs and collective marketing. When farmers have access to more appropriate services, inupts and markets and financial services, their production capacity and their competitiveness increases which results in increased incomes and increased employment.

Project ID

SE-0-SE-6-5118011002-UGA-32161

Activity status

2 - Implementation

Aid type

B04 - Basket funds/pooled funding

% to Uganda

100.00

Organisations

Funding

Sweden

Extending

Swedish International Development Cooperation Agency

Implementing

Other

Accountable

ROYAL DANISH EMBASSY

CRS code	%
Agro-industries (32161)	100.0