The Dutch development finance institution FMO has announced a proposed $35 million first-loss equity investment in the AGRI3 Fund, a blended finance initiative aimed at transforming food and agriculture systems in emerging markets. The fund is jointly advised by Fount and Cardano, and was originally launched in 2020 with the Dutch Government serving as its anchor investor.
The AGRI3 Fund is designed to mobilize both public and private capital to support the transition toward sustainable, climate-resilient agricultural practices. Its mission is to promote food systems that not only improve productivity and livelihoods but also preserve forests and natural ecosystems, a critical goal in regions facing environmental degradation and climate vulnerability.
FMO’s proposed investment represents a first-loss equity position, meaning it will absorb initial losses to de-risk the fund for other investors. This structure is intended to attract additional capital by enhancing the fund’s risk profile, making it more appealing to commercial and institutional investors.
The AGRI3 Fund provides a range of support mechanisms to financial institutions, including:
- Credit risk mitigation tools, such as guarantees
- Technical assistance to build capacity and expertise
- Incentives for global, regional, and local banks to invest in sustainable agriculture
By offering these tools, AGRI3 enables financial institutions to enter new markets, gain experience in climate-smart agriculture, and support projects that align with environmental and social impact goals.
