Ministry of Foreign Affairs of Denmark

Department for Green Growth

CONCEPT NOTE

Danish Agribusiness Fund (DAF)

Co-financed and Managed by IFU

10 November 2014 File No. 2014-18978

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Contents
1 Introduction .................................................................................................................................................... 3
1.1 Strategic questions to guide the discussion. ....................................................................................... 3
1.2 Summary of conclusions regarding the envisaged support. ............................................................. 3
2 Conclusions from preparatory analyses justifying the envisaged support ............................................. 4
2.1 Justification of the envisaged support ................................................................................................. 4
2.2 Key experiences and results of previous support to consider for future support. ....................... 5
2.3 Danish and national strategies for supporting agribusiness............................................................. 6
3 Preliminary overview of envisaged support................................................................................................ 7
3.1 Objectives of DAF ................................................................................................................................ 7
3.2 Theory of change ................................................................................................................................... 7
3.3 Management and administration of DAF .......................................................................................... 8
3.4 Area and types of investments ............................................................................................................. 9
3.5 Preliminary budget ................................................................................................................................. 9
3.6 Risks ....................................................................................................................................................... 10
3.7 Annex 1: Process Action Plan (PAP) for DAF ............................................................................... 11
3.8 Annex 2: Results Framework ............................................................................................................. 13
3.9 Annex 3: Assessment of Programmatic and Institutional Risks ................................................... 14
3.10 Annex 4: HRBA/Gender Screening Note ....................................................................................... 17
3.11 Annex 5: Climate Change and Green Growth Screening Note .................................................... 21
3.12 Annex 6: Assessment according to the budget support principles (this annex is not applicable
for this programme) ......................................................................................................................................... 25

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1 Introduction
1.1 Strategic questions to guide the discussion.
The intention of the proposed Danish Agribusiness Fund is to support Danish enterprises and
Danish interests1 in order to ensure sustainable and economically viable projects in developing
countries. At the same time, the DAF aims at enhancing good investment- and market
opportunities for Danish enterprises within agribusiness and food production related industries
and services. Is the proposed DAF framework an effective vehicle for this purpose?
The DAF is proposed to give priority to projects that enhance value chain development, i.e. will
have a direct or indirect impact on other players in the value chain, notably also on small-
holders and SMEs that may be too small for a direct DAF-investment. Is it justified and
realistic to include such a priority?
The proposal suggests that investments in all DAC countries can be supported. Should a
percentage of the investments from the DAF be restricted to fewer (poorer) countries, i.a.
Danidas contribution to the fund?

1.2 Summary of conclusions regarding the envisaged support.

As part of the Governments Strategy for Export Promotion and Economic Diplomacy
launched in June 2014, an Agribusiness Facility Danish Agribusiness Fund (DAF)2 should be
established. To establish the DAF, an amount of DKK 89 million is allocated in the 2015
Finance Bill and IFU is expected to contribute with a similar amount from own sources.
According to the Finance Bill, the DAF shall be administered by IFU on the basis of the
experience from e.g. managing the Fund for Central and Eastern Europe (I-fonden) and the
Danish Climate Investment Fund (KIF). The DAF will contribute to the creation of profitable
and sustainable projects within agricultural production and food processing in developing
countries. In parallel, the DAF is envisaged to enhance good investment- and market
opportunities for Danish enterprises within agribusiness and food production related industries
and services.

On this basis, IFU and Danida have initiated the process of establishing the DAF. Main
features of the proposed DAF include the following:

The objective of DAF is to contribute to sustainable economic growth in developing

countries by enhancing profitable and sustainable investments within agricultural
production, food processing and related industries;
The DAF is expected to mobilize additional funds from private and institutional
resources, so the total fund is expected to be about DKK 750-800 million;

1 Danish interest is defined as Danish economic interest stemming from either direct equity investment and / or delivery of
technology and / or know-how and / or management in a project
2 In Danish Landbrugsinvesteringsfonden (LIF)

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 Projects will be supported in partnerships with Danish enterprises and commercial
interests;
Investments in projects with clear developmental effects, such as smallholder inclusion,
employment, training and education, environmental sustainability and food safety will be
prioritized;
The success of DAF will be measured using indicators such as: expected and actual
employment, direct as well as indirect (i.e. smallholders and SMEs upstream and
downstream), generation of additional financing from other sources (mobilisation
factor), CSR- and financial performance;

The DAF will be managed by IFU according to similar principles applying for the I-
fonden and the Danish Climate Invest Fund (KIF).

A Process Action Plan showing the tentative planning schedule for formulation and approving
the DAF initiative is provided in Annex 1.

2 Conclusions from preparatory analyses justifying the envisaged

support
2.1 Justification of the envisaged support
Global food security is on top of the development agenda. The challenge of doubling the food
supply to feed more than 9.6 billion people in 2050 is a daunting task in an era of increasing
food demand and limitations in supply. Moreover, it is inconceivable to provide food security
worldwide without involving small-scale farmers, who in many African and Asian countries
account for approx. 80% of the farmland and provide up to 80% of the food products in these
countries.
Almost 2 billion people, or approximately 1/3 of the Worlds population, are working within
agriculture today. According to World Resources Institute (WRI) half the globes arable land is
used for agriculture. Agriculture is responsible for almost 25% of the emissions of green gasses
and for almost 70% of the consumption of drinking water. An increase in food production by
70% over the next 40 years will consequently be a delicate balance. It will be necessary to
secure food for 9.6 billion people in a manner, which will create jobs and assist in reducing
poverty without putting more pressure on the environment.
Danish agriculture and Danish companies are among the leading in the world with regard to
efficient use of resources. According to statistics of Danish Agriculture and Food Council,
Danish food production has increased by 18% over the last 20 years. Danish agriculture and
food processing companies can contribute on an important scale to secure efficient and
environmental friendly growth in the food production and processing in developing countries.
IFU has significant experience with management of similar funds, e.g. the I and the KIF
funds. Hence, IFUs administrative structure makes it feasible and cost efficient to establish a

4
new investment fund, which is to invest in projects within agricultural development and food
security in developing countries.
Furthermore, it is expected that DAF will perform in close cooperation with Danidas Business
Instruments, including the newly developed Danida Business Explorer and the Danida funded
SME-facility managed by IFU. In addition, it is envisaged that cooperation will be extended to
Danida supported private sector development programmes in which value chain development
constitutes important elements.
2.2 Key experiences and results of previous support to consider for future support.
IFU has vast experience from agribusiness related investments. Combined, IFUs classic
investments and the I fund, have invested in approx. 270 projects in more than 70 countries
covering projects within the entire value chain of agriculture from farm to fork. Supported
projects cover the following sectors: primary agriculture, animal production, food processing,
distribution, and production of agricultural machinery. IFUs classic investments and Is food
and agriculture related investments account for 21.5% of the funds total portfolio. Danish
industry has a historic close coupling with Danish farming and the funds large concentration of
agriculture projects reflects Danish companies well-established position in this area.
Through the years, IFU and I have invested approx. DKK 4.2 billion3 which has generated
total investments in the range of DKK 26 billion, equivalent to a mobilization factor of 6.2.
Out of the 270 investments, IFU and I are still involved in 61 projects: 13 in Asia, 15 in
Africa, 13 in Latin America and 20 in Central and Eastern Europe. The main areas are pig and
milk production, food production and breweries, but also supporting industries such as
machinery and fertilizer; and the investments have been made in partnership with Axzon,
Idavang, Orana, Fan Milk, Carlsberg, Kongskilde, Palsgaard, and others.
From 1990 to 2013, I invested in nearly 100 agri-related projects in Central and Eastern
Europe. IFUs and Is investments within agriculture and food related projects have yielded a
stable profit, which is approx. 25% above IFUs total profit for the period. From table 1 it can
be seen that IFU and I from 1990 2013 have obtained an IRR of 8.8% from agriculture and
food related share capital investments.
Table 1: Total activity within agribusiness of IFU and I from 1990 - 2013

3 Calculated in contracted investments

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Table 2, including projects in which the total investment from IFU or I amounts to DKK 10
million or more, shows that IFU and I from 1994 2013 by share capital investments
obtained and IRR of 12.0% in total.

Table 1: Total activity within agribusiness of IFU and I from 1994 - 2013

None of the projects with IFU or I investments are established and operating in isolation, but
link up to the food value chain in the respective countries. In most cases the food value chain
however has proven to be less than perfect and in some cases the project companies have been
forced to compensate by engaging in downstream activities (slaughterhouse and transport) or
upstream activities (feed mill, raw materials).
Some of the projects established with IFU financing have successfully included local
smallholders in sourcing of raw materials in the form of out-grower programs on commercial
terms, in some cases mixed with training financed under the IFU managed CSR Training Fund.
Among these projects are: Barley cultivation for a brewery in Nigeria, vegetables in Peru, bee-
honey in Nicaragua and maize and other cereals in South Africa, Zambia, Mozambique,
Malawi, Uganda and Tanzania.
In implementing DAF, IFU will pursue these principles further.
2.3 Danish and national strategies for supporting agribusiness
Agricultural business development has been part of Danidas development strategy since the
introduction of sector programme support in mid-nineties. In the strategy paper Partnership
2000 (1994), agri-business constituted, alongside growing recognition of the need for private
sector development in the fight against poverty, an important element of Danidas development
strategy. Within the framework of support to agriculture, fisheries and broader business sector
development, the value chain approach was introduced from around 2003. With the emergence of
Danida Growth and Employment Programmes in 2009/2010 (and recently Danida Green
Growth Programmes), agricultural value chain support with emphasis on agri-business are
pursued in most private sector development programmes.

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In the Danish strategic framework for priority area Growth and Employment 2011 2015,
the value chain approach becomes an official strategy. The value chain approach is maintained
in the latest Strategy for Denmarks Development Cooperation: The Right to a Better Life,
2012. The overriding purpose of value chain support is to promote better linkage between
primary agriculture, processing and manufacturing enterprises, service enterprises on both input
and output sides, microcredit providers, banks and the public sector. The common goal is to
increase the supply of quality products to both the international and the regional markets and
especially to the home market. An important aspect of the value chain approach is that the
impact of the value chain interventions should not only have a direct impact on the supported
enterprise or group of farmers, but should also have an (indirect) impact on other players in the
value chain.
This approach to agricultural and food security development is in line with the policy adapted
in most development countries supported by Danida.
It is envisaged that the DAF will give priority to participate in projects where the investments,
in addition to enhancing the performance of a single enterprise, will also have an impact on
other players in the concerned value chain. Especially projects that support development of
small holders and SMEs upwards and downwards the concerned value chain will have priority.

3 Preliminary overview of envisaged support

3.1 Objectives of DAF
The objective of DAF is to contribute to sustainable economic growth in developing countries
by enhancing profitable and sustainable investments within agricultural production, food
processing and related industries. The results will be a number of sustainable and profitable
projects that will create growth and employment, both directly and indirectly. Indirect
employment is envisaged in relation to smallholders and SMEs upstream and downstream the
value chain in which the investment project is situated. In addition, the number of CSR
initiatives is expected to increase significantly. These results are in line with the immediate
objective of the Danish Governments newly launched Governments Strategy for Export
Promotion and Economic Diplomacy. It is foreseen that 10-15 projects will be supported
annually which may create 1,200-1,500 direct jobs and 8,000-10,000 indirect jobs. Reference is
made to the Results Framework in Annex 2.
3.2 Theory of change
The theory of change can be described as follows: DAF provides investment in an agro-
business partner enterprise that has good knowledge of the value chain in which it operates.
The partner enterprise is capacitated with knowledge, skills, systems, technologies etc., through
the investment. The partner enterprise (often together with service providers4) assists suppliers
of inputs (for example smallholders through contract farming) to improve quality (standards)
and quantity of inputs and (sometimes) also support the distribution chain to make it more
effective. Because of the partner enterprises work with input suppliers and (sometimes)
distributors, opportunities for farmers, the partner enterprise and distributors to improve their
performance, by changing the way they behave, are created. If farmers, partner enterprise and

4 This may be financed through other Danida supported instruments or other government or donor supported programmes.

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distributors recognize the potential benefits of this opportunity, then they all take advantage of
the opportunity and improve their performance, for example increasing quality and range of
products to the market. This improvement in the performance of many smallholders, the
partner enterprise and distributors, increases their incomes and makes the value chains more
competitive, which again contributes to long-term, broad-based, sustainable and inclusive
growth. The simplified series of changes can be illustrated as follows:

Improved performance of
Agri-business enterprises Increased income for all
agri-business enterprises Increased quality and/or
DAF provides finance (and are capacitated with new value chain actors leading
and of upstream and quantify/efficiency of value
TA) technology market to jobs, growth and
downstream value chain chain produce
information etc poverty reduction.
actors

3.3 Management and administration of DAF

IFU will be the manager of DAF, and the investment appraisal and monitoring will be carried
out by IFU staff and expert advisors. The investment process will follow IFUs standard
investment procedure covering analysis of the investment partners, the local partners and the
projects. As facility manager, IFU will be responsible for identification, development,
assessment, structuring, etc. of the individual investments. The management set up will be
further elaborated in the project document.
The structure of DAF is proposed as follows:
The Government funds and IFU's contribution is placed in a DAF facility which will
make a current reinvestment of the Governments return and IFU's return;
The capital of the facility will be invested in the Agriculture and Food Fund (DAF 1),
established by private investors. The aggregate funds in DAF 1 from public and
private sources will then be invested over 3-4 years and the investments are exited
typically during a period of 6 8 years, however in all likelihood the exit period will be 8
10 years for primary production.

The investment strategy is envisaged as follows: It is anticipated that the investments are made
in partnership with companies with strengths in the areas within agriculture, aquaculture and
food production and supply, i.e. at any level of the food value chain. DAF will pursue the
objective of having the investment partners financial exposure matched or exceed DAFs
exposure. In most cases, DAF and the investment partner will expectedly have joint majority in
the projects. Normally, the investment partner will have operational experience and expertise
within the field of investment. The partner has traditionally been one of the key determining
factors of a projects success, as the partner is normally closest to the daily operation of the
project.

8
3.4 Area and types of investments
DAF should be able to invest in the entire agricultural value chain from farm to fork and
across sectors and regions. Investing in projects within deep-sea fishing should only be in
exceptional cases as sea fish is considered a scarce resource under pressure. Furthermore, DAF
should not invest in crops for energy production, as this type of projects must be considered to
be within the objectives of the KIF, if at all supported.
It is proposed that DAF invests in the following type of projects:
Investments in primary production (crops, gardening, agroforestry and husbandry) projects
which contribute to the increase in the quantity and quality of crops (grain, fruit and
vegetables) as well as meat and milk;
Aquaculture;
Treatment, drying and storage of crops;
Production of food;
Logistics;
Processing of byproducts and waste;
Production of machinery and equipment (agriculture and food industry);
Production of feed, vitamins and other ingredients for feed production;
Production of veterinary products;
Consultancy and other production advisory services

Investments will be in the form of equity, quasi-equity (convertible) instruments and debt.
Investments in projects with clear developmental effects, such as e.g. smallholder inclusion,
employment, training and education, animal welfare and food safety will be prioritized.
Elaboration on how the HRBA and gender principles will be addressed in the DAF is provided
in Annex 4 and issues related to environmental and climate change is elaborated in Annex 5.

In the formulation process, it will be considered whether it is possible to include CGAP in an

advisory capacity related to inclusion of smallholders in the DAF investment projects. Where
possible, IFU will collaborate closely with other Danida business instruments. In addition there
seems to be obvious opportunities for substantial synergy effects in a number of countries
where Danida supports value chain development as part of private sector development support
programmes.
3.5 Preliminary budget
The total paid-in capital is expected to be DKK 750-800 million; initially DKK 89 million is expected
from the Danish Government and a similar amount from IFU. In addition, private and institutional
investors are expected to inject an additional DKK 500-600 million in the fund.
Expecting a fund capital of about DKK 750 million and an investment period of about 4 years, the
indicative budgets for paid-in capital and disbursements are as follows5

Indicative budget for the paid- in capital of the Danish Agribusiness Fund 2015 2017 DKK
million

5 It is, of course, difficult to foresee the exact interest of institutional and private investors in the DAF and also to foresee
the exact annual investments.

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 2015 2016 Total
- Danida 89 89
- IFU 89 89
- Institutional 300 300 600
investors
Grand total 478 300 778

Indicative disbursements from the Danish Agribusiness Fund 2015-2018

2015 2016 2017 2018 Total
Annual 194,5 194,5 194,5 194,5 778
investments

The exit period is expected to be about 8-10 years.

3.6 Risks
IFU invests in projects located in developing countries. Political and economic conditions may
be turbulent in such countries, and the projects are often subject to high commercial risks. To
minimise the overall risk in IFUs investment portfolio, a set of risk policies has been
implemented in the investment policy. These policies include guidelines for appraisal of
commercial risk, for project, partner and country risk exposure as well as guidelines for
managing direct financial risk. It is anticipated that the strategy of investing through the entire
agricultural value chain, across sectors and regions, will mitigate risks related to agribusiness
investments.

See also the Risk Management Matrix in Annex 3.

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Annexes
3.7 Annex 1: Process Action Plan (PAP) for DAF
Time line Programme Documentation Responsible

December 9, Programme Committee Minutes from Meeting MFA/GRV

2014 Meeting

December Preparation of Draft and Draft Documents External

2014/January Final Draft Project Consultant/IFU with
2015 Document comments from GRV
and possible including
CGAP

Beginning of ToR for appraisal ToR GRV (with assistance

January 2015 forwarded to TAS from External
Consultant)

January Workshop with relevant Minutes from the GRV (with assistance
NGOs, organizations and workshop from External
others interested in DAF Consultant)

End January All draft documentation for Draft Project Document, MFA/GRV
2015 the project forwarded to and associated
TAS documentation as per
AMG

Beginning Discuss main issues to be Agenda for meeting TAS

February 2015 considered by Appraisal
Mission

February/March Appraisal Visits to IFU GRV/TAS

2015

Primo March Appraisal process finalized Appraisal Report, TAS

2015 Recommendations
summary

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Time line Programme Documentation Responsible

End March Formulation process Final Project Document Formulation

2015 finalised Consultant/MFA/GRV

Medio April Project Document with Final Project Document, MFA/GRV (with
2015 appropriation cover sheet annexes and additional assistance from
forwarded to KVA documents External Consultant)

End April 2015 Presentation to the Danida Minutes from Grant KVA and GRV
External Grant Committee Committee Meeting

May 2015 The minister approves the Resume from Danida KVA
project External Grant Committee
and Signature of Minister

June/July 2015 Parliamentary Finance Appropriation papers and KVA

Committee approves the Signature of Minister
project

August 2015 Signing of legally binding Legally binding agreements MFA/GRV

agreements (commitments)
with IFU

September 2015 Book commitment in First disbursement MFA/GRV

MFAs financial systems
within budgeted quarter.

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3.8 Annex 2: Results Framework

To be further elaborated during formulation

Preliminary Results Framework

Thematic Danish Agribusiness Fund (DAF)
Programme

Thematic The objective of DAF is to contribute to sustainable economic growth in

Programme developing countries by enhancing profitable and sustainable investments
Objective within agricultural production, food processing and related industries.

Impact Indicators Expected and actual employment, direct as well as indirect i.e.
smallholders and SMEs upstream and downstream, CSR- and financial
performance.

Engagement Title Danish Agribusiness Fund (DAF)

Outcome indicator Number of investments made by DAF and associated number of direct and
indirect jobs, CSR initiatives and financial performance

Baseline Year 2013 14 investments 5 in new projects and 9 additional investments -

with a total contracted investment of DKK 179.8 million in
agribusiness made by IFUs classic

632 direct jobs is expected in the 5 new projects.

Target Year 2017 12-15 investments made by DAF per year, which may support
1,200-1,500 direct jobs and 8,000-10,000 indirect jobs.

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3.9 Annex 3: Assessment of Programmatic and Institutional Risks

Programmatic Risks

Risk Factor Likelihood Background to Impact Background to assessment to Risk response Combined
assessment of potential impact residual risk
likelihood

A possible new Un-likely Being almost Major A new financial crises will limit A thorough involvement of IFU in Minor
global financial through a global Danish companies interests in preparation and implementation of
crises will limit financial crises it is investing in ventures in developing new DAF investments will limit the
Danish considered countries. This was also the case damage of a new crises.
companies ability unlikely that a new during the recent crises.
and willingness to crises will start
invest in ventures within the next 3
in developing years.
countries.
Political and/or Possible During recent Major Political or financial turbulence in a IFU will try to mitigate Minor
financial years financial or country with IFU investment will consequences concerning ongoing
developments in political often have a major negative impact projects, whereas new investments
individual turbulence have on the investments. will be halted until the situation is
countries limiting taken place in acceptable for investments.
Foreign Direct many developing Furthermore, investment demand
Investments. countries. and appetite from Danish
enterprises in such countries will be
expected to be limited.
Lack of interest Un-likely Danish enterprises Major If Danish enterprises loose interest More support and assistance to Minor
and/or capability may be vulnerable or capability to invest in developing agribusinesses through the DAF
by Danish towards investing countries it will be difficult or will make investments less
enterprises to in developing impossible for IFU to achieve the vulnerable and provide better
invest in countries targets of the DAF. changes for success and
developing especially In the sustainability.
countries. agricultural sector.
Commercial Likely Unless Major Commercial failure of investments IFU has elaborate risk management Minor
failure of investments are will mean that both the concerned procedures, comprehensive

14
individual carefully appraised partner enterprise and IFU will appraisal procedures and
investments. they can easily lead have high probability for losses. experience for mitigating the risks
to commercial detected prior to investments.
failure.

Institutional Risks

Risk Factor Likelihood Background to Impact Background to assessment to Risk response Combined
assessment of potential impact residual risk
likelihood

Misuse, corruption Likely According to Major Implementation of project Denmarks and IFUs zero Minor
and fraud by International interventions may be seriously tolerance principle will apply and
participating Transparency damaged if funds are mismanaged any mismanagement will be
Danish and/or Index, corruption addressed
local partners is widespread in
most developing
countries
Disagreement on Un-likely Experience shows Minor Support to agribusiness is an The DAF provides IFU with an Minor
IFUs investment that investments in important part of the strategy, and instruments that makes it attractive
committee smaller it is unlikely that committee to invest in agribusinesses.
concerning the investments are members will deviate from the
priority of projects less profitable for strategy.
and compliance IFU than
with agreed terms investments in
and conditions for larger enterprises.
Danish financial
support
Cooperation with Un-likely Board members Major Without DAF, IFU may be The DAF is designed so IFUs Minor
Danida and other may find that it is reluctant to finance significant normal procedures in
donor projects too bureaucratic to involvement in agribusiness and implementation will be used.
may not be on the work with donor thereby agri-based value chain Collaboration with Danida business
top agenda of IFU support and development. Important synergy instruments and private sector
require too many opportunities may be lost. programmes may extend chances
resources to for successful DAF investments.

15
 coordinate with
other programmes
It may be difficult Un-Likely Investors may be Major Private investors may find that The DAF is designed to minimize Minor
to attract reluctant to invest investments in agriculture contain the risks for private investors.
investments from in agrobusiness more risks than other investments. IFUs experience show that
private sector institutional and private investors
investors are interested in agri-business (and
not in smaller primary agricultural
projects)

16
3.10 Annex 4: HRBA/Gender Screening Note

Basic info

Title Danish Agribusiness Fund (DAF)

Country/ region Countries eligible for IFU climate investments DAC countries

Budget in DKK DKK 750 - 800 million of which 89 million from Danida
mio.

Starting date and September 2015 Investment period 3-4 years and exit of 8-10 years.
duration

Human Rights Based Approach

Assess whether a Human Rights (HR) Based Approach has been applied in the programme:

Human Rights Assessment and Standards

Issues: yes no Explain:

Have major HR analysis relevant for the country X Not applicable given the regional nature of the
been consulted (UPR, OHCHR, EU HR Strategy, fund.
other relevant donor documents)

Have key international HR standards and/or
mechanisms influenced choice and formulation of
outcome areas?
X IFU has signed up to the 10 UN Global Compact
principles, and is committed to implementing and
advancing these together with the project
companies. IFUs policy is based upon international
UN, ILO and OECD conventions, declarations
and agreements, including the UN Guiding
Principles on Business and Human Rights.

Where relevant, is application at national level, X Not applicable given the regional nature of the
including major gaps between human rights in fund.
principle vs. human rights in practice, evaluated and
identified?

Are key recommendations from UPR for the X Not applicable given the regional nature of the
thematic programmes and from any treaty bodies, fund.
special procedures, INGOs, HNRIs etc. that
require follow up at national level considered?

Are rights-holders identified? X People employed in the joint ventures and people
and communities affected by the joint ventures.

17
Are duty-bearers identified?
Assess whether Human Rights Principles have been applied in the preparation and in the design of the programme?
Non-discrimination: Are any groups among rights-
holders excluded from access and influence in the
thematic programme areas identified?
Are disaggregated data available on most vulnerable
groups?
List any key support elements included to promote
non-discrimination
Participation and inclusion: Are barriers for
participation, inclusion and empowerment of rights
holders identified?
List any key support elements included to promote
participation and inclusion
Transparency: Is the extent to which information is
accessible to rights holders including marginalised
groups assessed?
Where relevant, whether information is available in
other than official languages of the country in
question should be indicated.
List any key support elements included to promote
transparency
Are key accountability mechanisms in the relevant
area both horizontal and vertical listed?
Are obstacles, e.g. capacity and political-economy
incentives that duty-bearers and rights holders face
to exercise their obligations and rights listed?
List any key support elements included to promote
accountability
X Authorities responsible for private sector
regulations and framework.
X IFU advocates non-discrimination and encourages
the project companies to promote gender equality.
Companies must ensure that their policies and
practices promote equal opportunity and prevent
discrimination.
X Not applicable at programme level given the
regional nature of the Fund. Such issues will be
assessed at project level if applicable
X IFU uses the UN Global Compact self-assessment
tool which includes an assessment of all human
rights including discrimination
X Not applicable at programme level given the
regional nature of Fund. Such issues will be
assessed at project level if applicable
X IFU uses the UN Global Compact self-assessment
tool which includes an assessment of all human
rights including participation/inclusion
X Not applicable at programme level given the
regional nature of the Fund. Such issues will be
assessed at project level if applicable
X IFU uses the UN Global Compact self-assessment
tool which includes an assessment of all human
rights including communication /participation
/transparency e.g. free prior and informed
consent (FPIC)
X Not applicable at programme level given the
regional nature of the Fund.
Not applicable at programme level given the
regional nature of the Fund.
X IFU uses the UN Global Compact self-assessment
tool which includes an assessment of all human
rights including communication and reporting
towards stakeholder and vulnerable groups e.g.
free prior and informed consent (FPIC)
18
Results/Indicators
List any indicators designed to monitor the
realisation of specific human rights
List any indicators designed to monitor the
integration of the four principles
List any key indicators chosen to track capacity of
key partners (both rights holders and duty bearers)
Dialogue Partners
Define key dialogue partners (duty bearers) to be
addressed by the country programme
Define key alliance partners, including other
likeminded donors, multilateral partners and CSOs
State major dilemmas/risks associated with the
policy dialogue and proposed mitigation measures
(incl. reference to Framework for Risk Assessment)
Gender Screening Tool
Are key challenges and opportunities for gender
equality identified?
Are reference made to CEDAW-reporting, UPR,
and other relevant gender assessments?
Identify opportunities/constraints for addressing
gender equality issues
X IFU uses the UN Global Compact self-assessment
tool which includes an assessment of all human
rights issues, core labour standards, environmental
issues and anti-corruption. 45 questions and +200
indicators. Not all indicators are relevant for every
project, but whose which are and which the
company doesnt have a clear approach towards
will be identified at project level and used to set up
a CSR action plan
X See above
X See above
Not applicable given the regional nature of the
Fund. Such issues will be assessed at project level if
applicable
IFU uses the UN Global Compact self-assessment
tool which includes an assessment of all human
rights issues and prepared by the Danish Institute
of Human Rights
Not applicable given the regional nature of the
Fund.
Not applicable at programme level given the
regional nature of the Fund. Such issues will be
assessed at project level if applicable
Not applicable at programme level given the
regional nature of the Fund.
The employment opportunities for women varies
depending on the project. Traditionally, most jobs
for women within agribusiness are low skills jobs,
and very few women are in managerial or
19

Describe key strategic interventions to promote
gender equality within each thematic programme?
Explain how gender specific purposes will be
reached, which strategic approach, what activities
are planned
Define expected outputs.
Identify gender equality indicators aligned with
national targets on gender if possible.
supervision positions. In DAF investments, gender
equality will be pursued at all levels. It is also
expected that many indirect jobs - that may be
created upstream or downstream of the
agribusiness enterprises supported - will provide
opportunities for women, for example through
female cooperatives or female farmer groups.
Such issues will be assessed at project level if
applicable
IFU promotes gender equality as applicable
Empowering women is an indispensable way of
advancing development and reducing poverty.
Discrimination against women - including gender-
based violence and reproductive health inequities
contributes to maintaining inequality. The policies
and activities of the project company must respect
womens rights and promote financial, social and
political equality between men and women.
See above
Not applicable at programme level given the
regional nature of the Fund. Such issues will be
assessed at project level if applicable
Not applicable at programme level given the
regional nature of the Fund. Such issues will be
assessed at project level if applicable
20
3.11 Annex 5: Climate Change and Green Growth Screening Note

Basic Information
Programme title: Danish Agribusiness Fund (DAF)
Country/region: Global (all DAC countries)
Estimated allocation: 750-800 Million DKK of which 89 million from
Danida
Brief description of the Programme Investment in Agri-businesses at all levels of agro-
support: based value chains to improve food availability
Dates (expected): Programme committee: End November. Appraisal: March 2015

Climate change screening

Assess the status of policies and strategies to respond to climate change in the country and
sector. If the issue is inadequately dealt with (indicated by a tick in the no box), please add
comments and assess the potential impact on the program (see also next steps section,
below).
Issue: Yes No Comments and further
work to be done:
1. Are the processes and impacts of climate change x Not applicable at
documented (e.g. in national communications to the programme level given the
UNFCCC)? regional nature of the
Fund. Such issues will be
assessed at project level if
applicable
2. Is there a national climate change policy or strategy, x IFU has a
including estimates of the economic costs of adaptation? sustainability policy
which includes a
preventive and
precautionary
approach to
environmental
challenges including
climate change
3. Have nationally appropriate mitigation actions x See above
(NAMAs) and or Low Carbon Development Plans
been identified (e.g. targets for renewable energy
production)?
4. Has a national adaptation programme of action x See above
(NAPA) been approved identifying key sectors where

21
 adaptation is required?
5. Are there effective and operational meteorological and x
disaster preparedness organizations?
Summarize the overall assessment of climate change impacts and responses:

IFU do access whether the project has a positive impact and if relevant estimate net carbon
savings in t CO2e (project emissions are less than the baseline emissions) or whether the project
has a negative impact. If the project is most likely a significant net emitter of carbon (>25,000 t
CO2e per year) there will be a requirement for actions to reduce emission.

Screening of Country Green Growth Framework

Assess the status of policies and strategies for green growth and the procedures for
environmental impact assessment in the country and sector. If an issue is inadequately dealt with
(indicated by a tick in the no box), please add comments and indicate further work to be
undertaken (see also next steps section, below).
Issue: Yes No Comments and further
work to be done:
1. Do national procedures and legislation for Strategic x Not applicable at
Environmental Assessment (SEA) and programme level given the
Environmental Impact Assessment (EIA) exist? regional nature of the
Fund. Such issues will be
assessed at project level if
applicable
2. Are there operational Green Growth Strategies/actions x See above
plans and/or National Environmental Action plans?
3. Are there regularly updated state of the environment x See above
reports and green growth monitoring systems with
indicators?
4. Is there sufficient institutional and human capacity for See above
green growth and environmental management in the
sector concerned?
Summarize the overall impression of the Country Green Growth Framework:

Not applicable at programme level given the regional nature of the Fund.

Climate change and Green Growth opportunities and risks of programme

Assess how climate change and environmental opportunities and risks will arise through the
programme:
Will the programme ... Oppor- Risk: None:
tunity:
1. ... support green growth initiatives including livelihood x
improvements and resource efficiency
2. ... support the creation of decent and green job? x
3. ... contribute to effective management and efficient use of x

22
 natural resources

4. ... have direct or indirect impact on climate change (e.g. through x x

increasing or reducing emissions of greenhouse gases)?
5. ... have direct or indirect impact on occupational health and x
safety?
6. ... lead to changes in land and resource tenure and access rights, x x x
including the rights of indigenous peoples?
7. ... include activities within or adjacent to protected or x x
environmentally sensitive areas?
8. ... have direct or indirect impact on the resilience of communities x
in the face of natural disasters?
Summarize and explain climate change and green growth opportunities:
Projects related to food production in the whole value chain could by using best available
technology and increasing competences and productivity improve livelihood, resource efficiency
and reduce the impact of climate change. IFU financed project shall comply with IFUs
sustainability policy including land rights , health and safety and other human right issues such
as ILO core standards.
Furthermore IFUs sustainability policy require projects to consider the environmental
performance through a preventive and precautionary approach that addresses environmental
challenges, including climate change, loss of biodiversity and land use changes
Summarize and explain climate change and green growth risks:
Some individual projects may include issues related to environmental sensitive areas and issues
in relation to indigenous people. Such issues will be assessed in accordance with international
guidelines set up by the World Bank and IFC
Identify requirements for undertaking an Environmental Impact Assessment (EIA).
Categories are: [ A ] Full EIA required; [ B ] Partial EIA required; [ C ] No EIA required6.

Intervention Name Category A, B or C:

1: Select category:
2: Select category:
3: Select category:
The internationally accepted category levels A, B or C (high, medium and low impact
respectively) as well as the category B+ (determining projects of generally medium impact
with some specific higher impact features) are applied by IFU to all project investments.
A projects: ESIA by a qualified expert, in compliance with IFC guidelines (PS1
B+ projects: ESIA by a qualified expert, in compliance with IFC guidelines (PS1) at least for
areas with significant specific risks (partial ESIA)
B projects: No ESIA
C projects: No ESIA

6 Category A = Intervention is likely to have adverse environmental impacts that may be sensitive, irreversible, and
significant in scale/scope; B = Intervention is likely to have negative impacts, but which are less significant, not as sensitive,
numerous, major or diverse; C = The environmental risk of the intervention are of little or no concern.

23
The CSR self-assessments covering all 10 Global Compact principles (45 indicators)- are
carried out for all projects no matter category.

Will national regulations and procedures for EIA be applicable to activities of the programme
that have potential environmental impacts? Yes - No
In some countries EIA procedures are implemented to an extent useful.

When will the EIA be undertaken?:

See above

Next Steps process action plan

Need for further work during the preparation, appraisal and implementation of the programme
arising from the climate change and green growth screening:

Suggested activity: Action needed Comments and elaboration:

1. Assessment of green growth and climate change Not applicable
opportunities in sector development plan.
2. Assessment of capacity for green growth and Not applicable
climate change management in the sector/country.
3. Prepare ToR for and conduct Country Analytical Not applicable
Work.
4. Prepare ToR for and conduct SEA(s) of sector Not applicable
policies or plans.
5. Prepare ToR for and conduct EIA(s) for Not applicable
programme interventions.
6. Initiate donor harmonisation in the sector on Not applicable
green growth and climate change.
7. Other...?

Signature of Screening Note

Place and date

.
(name)
Danish Mission in

24
3.12 Annex 6: Assessment according to the budget support principles (this annex is not
applicable for this programme)

25