SHONA AE Innovation Fund

Lead Organization:

SHONA Group Limited

Partner Organizations:

Biovision Foundation Switzerland, Dunn Family Foundation, Stichting DOEN, ESAf CoP, Rootical Business Builder, TIFS Initiative, AFSA, Agroecology Fund, Netherlands Food Partnership, PELUM, Aceli Africa, Practical Action, and others

Community of Practice:

West Africa

Countries:

Uganda Kenya

Duration:

11/2023—5/2025

Overview:

The future of soil and ecosystems is at crossroads: Land degradation is rising, soil fertility declining, water cycles breaking down, pests and diseases becoming more prevalent and resistant, and biodiversity loss reaching a record high. This, while food insecurity and rural poverty continue to persist. Evidence is overwhelming that current conventional farming systems based on monocultures and external inputs cause and exacerbate climate change. 

Key to tackling the above is transitioning to a food system that regenerates soils and climate, conserves water, reduces post-harvest food waste, recycles and reuses waste, and builds on rather than reduces biodiversity while building profitable agrifood businesses that create dignified work and jobs. 

While a flourishing private sector of viable agrifood businesses is needed to produce and distribute enough healthy food for the growing population, African-led agroecological enterprises (AEEs) that do so while restoring soil health, minimizing the ecological impact of food production, and building biodiversity are rising. AEEs act as key input and output markets for agroecological primary producers and, thereby, as potential multiplicators for AE growth as a whole.

However, AEEs lack critical early-stage support to become profitable, investable businesses. They are usually perceived as too complex and risky, have a long conversion period, and are not applicable on a large scale: common misconceptions about AEE. Existing business and financial support services do not match AEE needs because of high investment minimums (USD 100,000 upwards), high collateral demands, high interest rates, short loan periods, single commodity logic and metrics, and lack of holistic business support. Most investments are geared toward models of conventional agriculture, which usually has little consideration for a longer term perspective, product diversity, or biodiversity, and little respect for local Indigenous knowledge in farming systems.

Grant Aims:

The overall goal is to bring AE out of its niche and unlock its full transformative power and positive impact on all three sustainability dimensions: people, planet, and profit. Investment in AEEs guarantees ecological and economic benefits while building resilient communities. 

Specifically, the project aims to:

  • Scale AE successfully through increased flow of capital to AEEs in East Africa (impact level) per the theory of change for AE enterprise development.
  • Provide and create, in the long term, agroecological business cases to highlight successful and inspiring AEEs. Shorter term, bring AEEs to economic success through increased availability of suitable capacity building and investment. 
  • To make the above happen, provide interested funders and investors with a structure (fund) to invest in agroecological enterprises.

Outputs and Outcomes:

Outputs:

  • Accelerator with revolving loan fund designed and set up
  • Sixty AEEs in Uganda and Kenya selected and participating in AEaccelerator program
  • Thirty-six AEEs receiving loans of USD 10,000–50,000 from AE revolving fund 

This will lead to the successful scaling of AE, resulting in:

  • Improved terrestrial ecosystems, biodiversity, soil fertility, forests, regenerative land use, agricultural resilience, and farming systems
  • Improved food and income security of agroecological farmers
  • Increased sustainable economic growth through agroecological enterprise development
  • Increased climate action to combat climate change and its impacts
  • Improved local wealth, jobs, and well-being in Africa

Outcomes:

  • AEEs brought to economic success through increased availability of suitable capacity building and investment
  • AEEs in Uganda and Kenya selected and participating in AE accelerator program annually
  • Twelve AEEs receiving loans of USD 10,000–50,000 from revolving loan fund