Applications Invited for Regional Grant ‘Private Sector for Food Systems (PS4FS)’

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About the Organization

The International Fund for Agricultural Development (IFAD) is a specialized agency of the United Nations with its Headquarters in Rome, Italy.

IFAD was established as an international financial institution in 1977 to finance agricultural development projects primarily for food production in developing countries. IFAD's mission is to enable poor rural people to overcome poverty and is dedicated to eradicating rural poverty in developing countries. Working with rural poor people, governments, donors, non-governmental organizations and many other partners, IFAD focuses on country-specific solutions. This can involve increasing rural poor peoples' access to financial services, markets, technology, land and other natural resources. IFAD is a not-for-profit institution that relies on funding from its Member States.

While the Headquarters are in Rome, there are approximately 40 field offices in Africa, Asia and America.

About the Grant

Selection of an institution to co-design and implement the regional grant ‘Private Sector for Food Systems (PS4FS)’ through an open competitive selection. The selected entity will participate in the co-design and implementation of the project, fostering effective collaborations between private financial institutions, governments, value chain actors, financial institutions, food system actors, and the International Fund for Agricultural Development (IFAD), with the goal of advancing sustainable and inclusive rural development. This will be achieved by:

• Undertaking a sub-regional feasibility study (country(ies) TBD) to stimulate and promote the potential development of risk sharing mechanisms (e.g., investment platforms) that cater to farmers’ access to finance, which can be leveraged by both IFAD and mission aligned stakeholders (investors/FIs, off-takers, value chain actors). The approach of such study is of a public good and would not be limited to IFAD interventions only.
• Establishing an innovation challenge fund to provide financial incentives for banks that develop and implement successful lending models for women entrepreneurs with the aim to foster a collaboration between the public sector, private financial institutions and women-owned SMEs to create a supportive financing ecosystem, including setting up advisory services to help women-owned SMEs with loan application processes.
• Analyzing and supporting 3P/4Ps models, farmer organization classification and graduation models, matching grant engagements and other mechanisms of interaction with the private sector to promote and drive additional private sector investment in inclusive climate-resilient and smart agriculture and food value chains.
• Building the capacity of IFAD's Project Management Units (PMUs) to identify, monitor and implement these initiatives and design internal processes to draw on this new capacity, and ensure effective and efficient analysis of potential private sector partners.

The organization shall propose an appropriate strategy and viable mechanism to achieve these objectives, ensuring the efficiency and sustainability of the initiative.

Background and Context of the Grant:

Enhanced commitment to private sector engagement. The grant responds to IFAD13 priority of fostering sustained and expanded collaboration with the private sector. It achieves this by involving private sector in sustainable production, access to markets and technology, youth training and entrepreneurship, and enhanced resilience to climate change.

Despite IFAD’s efforts to work with the Private Sector, there are still several missing elements to develop and systematize inclusive business models, and the need to build the capacity of IFAD’s project teams to work with Private sector. Such issues cannot be tackled solely through IFAD loan-funded single-country operations; nor are they the purview of direct NSO investments, thus, there is a need to stimulate these engagements with grant funding. This grant proposal will align directly with IFAD’s new Private Sector Engagement Strategy.

The agriculture sector has enormous prospects in local and global markets, and it is crucial to understand the market requirements and incentives to effectively engage with multidisciplinary stakeholders that directly impact the sector’s development. IFAD believes that smallholders, their organizations, and related SMEs have a place in sustainable, profitable food production.

Despite significant business opportunities available in the agriculture and agri-processing sector, private investment linked to smallholders has been lackluster and with limited returns. Some of the main challenges for effective Private sector engagement in the agriculture sector include:  i)Small Farmers’ limited opportunities and capacity to produce at large scale ; ii) Limited linkages with Formal Private Sector;  iii) Need to ensure sustainability and market standards beyond projects ”completion”, iv) Lack of Cold Chain, Grading and Packaging facilities; v) Constraints related to access to finance for small and medium enterprises for women; and vi) Private Sector entities have limited knowledge about IFAD projects and vice-versa. Therefore, stimulating, and incentivizing linkages with the private sector to help organize small farmers, provide sustainable financing and value-added services, and aggregate products for processing and to supply larger city markets, and monitor their results, will sustainably provide better prices to small farmers.

Grant Proposal:

This grant aims to catalyze private sector partnerships with smallholder producers and their organizations, to stimulate private sector investments in inclusive climate-resilient and smart agriculture and food value chains. The chosen theme aligns seamlessly with IFAD13 priorities and IFAD’s Regular Grant Policy, the forthcoming IFAD Private Sector Strategy, IFAD’s proven expertise in the Mekong region and the unique needs of private sector-oriented projects in the Asia-Pacific Region. This alignment manifests in several key dimensions:

• Focus on innovation. The grant will place a significant emphasis on innovations, spanning technology, processes or practices. It will actively promote the development of risk-sharing platforms and support the creation of innovative and accessible financial products, including VCF products, tailored for women-owned SMEs.
• Climate-Smart agricultural productivity and inclusive value chains. The grant aims to encourage private sector investment in inclusive climate-resilient and smart agriculture and food value chains, encompassing investments in traceability, market and pricing transparency, and monitoring climate-related investments.
• Capacity building. By leveraging on the existent Programme of Loans and Grants (PoLG) of IFAD, the grant will build the capacity of IFAD's PMUs to identify, implement and monitor these initiatives.

Eligibility

The proposing entity is required to possess a minimum of 5 years of hands-on experience in the following areas:

• Legal capacity: the organisation must be legally registered in an IFAD Member State.
• Project Management and Implementation: demonstrated expertise in managing and executing projects specifically aimed at enhancing rural development, promoting financial inclusion, and fostering inclusive food systems. This includes experience in designing, coordinating, and evaluating project activities that support small-scale farmers and rural communities.
• Facilitating Multi-Stakeholder Collaboration: a proven track record of successfully facilitating collaboration among diverse actors, such as government institutions, value chain actors, financial institutions, investment funds, commercial banks, rural banks, credit cooperatives, microfinance institutions, companies working with small-scale producers, and international cooperation actors. Experience in the design and implementation of Innovation Challenge Funds will be positively evaluated.
• Development of feasibility studies of investment platforms, ideally in topics related to rural development.

Proposing institutions may partner with other organizations if deemed appropriate. In such cases, only the proposing institutions will be responsible for achieving the project objectives and outcomes, producing the expected outputs, and managing the overall project, including financial and technical reporting to IFAD. Partner institutions will be sub-contracted by the proposing institutions. In case of proponents partnering with other organizations, a single application must be submitted to IFAD for consideration, clearly indicating the lead agency and the names of all collaborating partners.

How to Apply

To be considered, organizations must submit:

• Project proposal in English using the Concept Note template (Annex 4);
• Budget table by activities (excel document);
• Self-certification of eligibility for IFAD (Annex 2 or 3), duly completed;
• Non-Disclosure Agreement for the received information (Annex 5).
• Institutional profile of the organization highlighting its capacity to design and implement projects aimed at enhancing rural development and fostering inclusive food systems, proven record of facilitating collaboration among relevant stakeholders and capacity to engage effectively with local actors in the countries included in the proposal.

The requested documents should be sent in PDF format (except the excel budget) to aprgrant1@ifad.org with “PS4FS Proposal” in the subject. All documents are mandatory for the proposal to be evaluated by IFAD.

The deadline to receive proposals is Monday 12 August 2024 at 23.59 (UTC +2). Questions can be sent to aprgrant1@ifad.org until 6 August 2024.

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Tags Environment and Sustainability Food, Agriculture and Nutrition Rural Development Others