Uganda: Pearl Capital Partners backs agro-processing company
The Yield Uganda Investment Fund, which is managed by Pearl Capital Partners, has announced an investment of $2.5 million in Pura Organic Agro Tech Ltd structured in both straight equity and patient debt investment. This marks the fund’s eighth investment into the Ugandan agriculture sector but more uniquely, the first substantial value addition investment into the cassava value chain.
Pura, which was incorporated in 2011, is located in Nakasongola District, Central Uganda. Over the past few years, Pura has been developing its nucleus farm, expanding the acreage cover of its cassava portfolio, producing cassava cuttings for smallholder farmers, and is now evolving into cassava processing and value addition.
Yield Fund’s investment into Pura is positioned to support the acquisition and installation of a vertically integrated cassava processing plant that is envisaged to produce an assorted line of three products comprising of high-quality cassava flour (HQCF), tapioca starch, and sago (an edible starch delicacy that is made from cassava). In tandem with Yield Fund’s investment, Pura has successfully obtained a business development support (BDS) matching grant facility of $225,250 managed by the International Fund for Agricultural Development (IFAD) to enhance both the technical and governance facets of the business as well as develop a cassava out-grower scheme, which will guarantee the company’s cassava supply to the new processing plant.
Wanjohi Ndagu, partner at Pearl Capital Partners, commented: “We are honoured to work with Pura to boost cassava value addition and achieve Uganda’s import substitution industrialisation strategy. Undoubtedly, the selection of cassava as a priority commodity in fostering sustainable agro-industrialisation in the Third National Development Plan (NDP III) can be linked to the significant benefits of this nutrient-dense food staple on food security and economic transformation among households. Our eighth Yield Fund investment not only presents an opportunity to provide sustainable solutions to key challenges faced by cassava farmers but also to attain Uganda’s lofty development goal of decreasing her dependence on agro-processed imports.”
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