Morgan Stanley, IFC Invests $7.5 million To Boost Food Security

morgan_stanley_internal

VENTURES AFRICA – Eleni LLC, a newly formed company led by CEO Dr. Eleni Gabre-Madhin, announced today that Morgan Stanley and International Finance Corporation (IFC) have both agreed to make an equity investment totalling about $7.5 million in the Kenya-based company which will incubate and support the formation of agricultural commodity exchanges across Africa, helping to promote food security.

Global financial services firm Morgan Stanley has raised $5 million in funding for the investment while IFC, the largest global development institution focused exclusively on the private sector, is to invest up to $2.5 million.

“I cannot think of a better time to develop this business in Africa. Africa is the world’s last frontier for agriculture, with only one quarter of its yield potential achieved and seventy percent of its farmland as yet unused”, said Dr. Eleni Gabre-Madhin founder Eleni LLC

Commenting on the deal, the Managing Director of Morgan Stanley Mr. Gary Offner the company is “pleased to join with IFC in supporting eleni and its vision of improving transparency and liquidity in agricultural markets in the developing world, where food security is often a pressing concern.”

According to Georgina Baker, Director Trade and Supply Chain IFC, the investment will enhance productivity and risk management while making finance more accessible for farmers and helping them to increase their share of profit and get paid more quickly.

Beyond the initial funding, each country or regional exchange project will involve the formation of a private investor consortium. Eleni aims to rollout exchanges progressively across Africa and elsewhere in the coming years.

It is also anticipated that a third investor, the 8 Miles Fund, an Africa-focused private equity fund, will join the investment round within a month, together with envisaged support from the African Development Bank.

Building on the success of the highly acclaimed Ethiopia Commodity Exchange (ECX), which she founded and managed from 2008 to late 2012, Gabre-Madhin and co-founders Mr. Keith Thomas and Mr. Jawad Ali have recently launched eleni, which is positioned to be the industry leader in designing, building, and supporting the operations of commodity exchange eco-systems in frontier markets.

The Company’s business model is based on delivering turnkey projects on a Public-Private Partnership (“PPP”) basis, combining private investment with the best of know-how, technology and management, to support exchange projects. The Company expects to launch several such projects in 2013.