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The financing needs of the agriculture sector in fragile situations are all the more significant as they are poorly covered by commercial banking services. However this finances are essential to support staple food production, contribute to the sustainability of producers’ incomes, structure local value chains and reduce dependence on imports. Nevertheless, the overlapping risks inherent to the sector and the different contexts constrain the mobilization capacities of development financial institutions.

The agricultural sector is an important support for formal employment, generating 80% of jobs in fragile context and represents a significant development vector. As a development institution, targeting the agricultural sector is particularly relevant. While it often serves as an initial entry point for private sector financing in these regions, financing agri-business also contributes to supporting food resilience among populations while enhancing their economic stability. By actively helping to structure supply chains, agribusinesses facilitate the integration of populations in rural areas and limit migration to urban centers. A whole ecosystem is often created around plantations or processing plants, providing housing for workers and their families, as well as essential public services for community life (health centres, schools, etc.).

Moreover, climate risks, to which the agricultural sector is traditionally exposed, are more prevalent and cause proportionately more damage in fragile situations. The vulnerability of farmers is even greater as they have limited means to assess and adapt to these risks (in the absence of insurance solutions, for example). Given the overlapping risks, the role of development finance institutions (DFIs) such as Proparco is particularly important.


Situated in high-security risk areas, often dif-ficult to access, businesses face multiple constraints. The lead time for project appraisal is challenging to assess in advance. For example, the Sudanese conflict in 2023 halted Proparco’s activities in this region due to the destruction of infrastructure (including facilities which were essential to the execution of a project that was being vetted at the time). In Iraq and Yemen, the security situation has prevented on-site access, limiting teams’ ability to conduct their analyses and greatly impacting deadlines. Access problems have therefore made things difficult and discouraged consultants from travelling to the sites. More critically, the day-to-day operations of these businesses are hampered and their long-term viability is jeopardized. They encounter complex logistical problems (both in terms of procurement and distribution) and bear significant unavoidable “parasitic” costs. Businesses also face major challenges in attracting and recruiting relevant profiles willing to work in difficult regions, reducing their ability to establish satisfactory governance and build suitable management teams. The project sponsor – often the founder of the structure – is frequently on their own or with a very small team to implement the strategy and operations while managing interactions with the DFI.

Given the economic instability and heightened exchange rate risk (strong fluctuations, non-convertibility and non-transferability issues), the business environment is unsettling for investors. Moreover, the weakness of central government financial resources leads to significant deficits in public infrastructure and excessively high taxation policies contribute to the development of the informal economy and parallel currency markets, thus placing countries in less virtuous cycles.

In addition, political instability means that public policies can vary enormously, creating considerable uncertainty, particularly regarding the regulations concerning the activities of counterparties or the treatment of foreign creditors (including DFIs). In some countries, the usefulness of accepting collateral is questioned when the enforcement of court rulings is problematic and the chances of recovering debts relatively low – which further increases the risks of the project. Lastly, the limited choice of financial and legal advisers makes it difficult to appraise and complete projects. Auditors operating to international standards or business law firms prioritise large corporations, neglecting smaller companies, or they charge unfairly high rates.



In these complex situations, Proparco nonetheless manages to support projects, although unfortunately, the number and volumes involved remain well below the needs. For projects taken as a whole, the transformation rate remains low. Since 2016, of 25 projects identified for a total amount of around €280 million, only five have actually gone through for a total amount of approximately €50 million. Projects have more chance of succeeding in certain countries with a more developed and solid economic fabric and a more stable political climate, or when the borrowers are backed by large, geographically-diversified groups with good track records (i.e. there is access to a company’s business history, providing an insight into its behaviour and capacity to adapt). For instance, IFC, FMO and Proparco have partnered with HSA Group, the largest private company in Yemen and one of the country’s main suppliers of staple foods. Building on this success, the IFD consortium has renewed its support by helping Tiryaki to strengthen food security in Iraq and to diversify the country’s economy. Collaboration between international players in supporting quality sponsors is therefore a major advantage.



DFIs’ resources and conditions of intervention have historically diverted them from directly financing small structures (micro-businesses, SMEs) even though these represent the majority of formal agricultural players and carry long-term investment projects. The offerings of DFI’s must evolve to provide smaller amounts of funding on sustainable terms. It is in this sense that Proparco has aimed to adopt a specific strategic approach for fragile countries, focusing on the agriculture sector. It involves a specific approach to small, high-impact projects and deploying a suitably adapted technical assistance. This assistance, in the context of fragile countries or regions, has mainly benefited (directly or indirectly) the agro-industry sector over the past 10 years (31 projects).

This strategic positioning also involves revising the acceptable risk appetite and adapting the related tools. DFIs, including Proparco, must deal with realities that require a high level of pragmatism when applying their requirements. The have to contend with constant tension between the desire to reduce information and commitment demands from their clients and the need to identify and mitigate risks associated with their intervention. Indeed, DFIs cannot deviate from their prudential or accountability obligations when their shareholder base is predominantly public.

Blending and de-risking (even partial de-risking) can be used to raise capital for projects with high-impact but particularly high credit risk. The FARM (Food & Agriculture Resilience Mission) initiative, launched by France in 2022, is an important step in scoping numerous projects throughout Africa that are normally outside of Proparco’s scope. However, this is not enough. One of the obstacles to scaling up the agricultural sector in fragile situations is the cost of financing in local currency, which is often prohibitive because of costs incurred to protect against potential losses due to market risks (i.e., hedging costs). Yet solutions do exist, such as subsidising the interest rate charged to make debt servicing sustainable.

In fragile countries, environmental and social risks are often higher, especially concerning land, working conditions, deforestation and pesticide use, etc. DFIs face a major challenge: ensuring that the projects they support comply with international standards (IFC standards) when counterparties are already struggling to comply with local regulations. Clearly, a longer-term approach is required. We need to accept a slower progression curve for the counterpart, which may not achieve certain objectives or performance indicators until much later in the project life cycle. It is therefore necessary to find a balance to guide these companies toward better standards without imposing long and unrealistic action plans, given their more limited technical, human and financial resources.



Our experience in accompanying projects in fragile contexts shows that the tools and standards applied by DFIs are not always flexible enough to make support truly effective. The burden of instructions and requests for information is often incompatible with the counterparty’s ability to respond. It is necessary to simplify the legal structure, guarantee mechanisms and contractual formalities.

In this respect, it’s worth mentioning the value of the IFC’s “upstream” approach, offering advisory services to help businesses structure in the upstream phase and make them “eligible” for DFI financing. Mention should also be made of the Africa Resilience Investment Accelerator (ARIA) initiative launched by BII and FMO, in which Proparco is participating. This accelerator brings together DFIs to design and implement pragmatic strategies to support the private sector in fragile countries. In 2023, ARIA made it possible to vet and approve an investment project in Sierra Leone.

Proparco is also convinced of the significant leverage represented by developing partnerships with large major agro-industrial groups to structure agricultural sectors, by pooling technical, operational and financial expertise, together with environmental, social and governance (ESG) analyses. Lastly, due to the strong accountability obligations, reputational risk is a sensitive issue for DFIs, leading them to abandon many projects. The question arises of allowing them to take more risk and tolerate a form of “right to make mistakes” in fragile and volatile situations. This could be considered by strengthening coordination with NGOs active in these regions, especially regarding ESG aspects.

The search for a balance between action, which carries a risk of negative impacts, and inaction, which preserves DFIs from contrib-uting to these negative impacts, but deprives the countries concerned of positive impacts, is even more delicate in fragile countries context. Nevertheless, deployment of support to the agricultural and agribusiness private sector in such regions is a crucial issue, and Proparco, like many DFIs, is strengthening its capacity for intervention.

Claire Fillatre

Claire Fillatre

Head of Agribusiness division


Claire Fillatre joined Proparco in 2017 and took charge of the Agribusiness Corporate Financing division in 2021. In this role, she is tasked with defining and deploying Proparco’s strategy in this sector and deploying agribusiness financing projects in developing countries. Claire is a graduate of ESCP Europe Business School and holds a Master’s degree in Business Law from the University of Paris I - Panthéon-Sorbonne. She spent the early part of her career with HSBC France.

Fariza Chalal

Fariza Chalal

Investment Officer, Agribusiness division


Fariza Chalal joined Proparco in 2008 and is currently an Investment Officer in the Agribusiness Corporate Financing division. Previously in legal law firms and in-house legal team she has over 18 years’ experience of legal and financial structuring and private sector financing in developing countries.

Quentin Elie

Quentin Elie

Intern, Agribusiness division


Quentin Elie has joined Proparco’s Agribusiness Corporate Financing division for his end-of-studies internship. Quentin is a master’s student on the Audencia’s Grande École programme and previously gained experience in the Audit department of PwC Luxembourg and in the M&A and Investor Relations team at Cdiscount.


Proparco is a subsidiary of the AFD Group focused on private sector development. It has been promoting sustainable economic, social and environmental development for over 45 years.

Proparco provides funding and support to both businesses and financial institutions in Africa, Asia, Latin America and the Middle-East. Its action focuses on the key development sectors: infrastructure, mainly for renewable energies, agribusiness, financial institutions, health and education. Its operations aim to strengthen the contribution of private players to the achievement of the Sustainable Development Goals (SDGs) adopted by the international community in 2015.

To this end, Proparco finances companies whose activity contributes to creating jobs and decent incomes, providing essential goods and services and combating climate change.

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