Islamic Development Bank To Launch $600 Mln Food Fund

The Islamic Development Bank (IDB) is partnering with Dutch asset manager Robeco to launch a $600 million food and agriculture fund to invest in projects that promote steady food supply, an issue widely seen as a catalyst for the Arab Spring rebellions.

Food prices grabbed the attention of world leaders after their spike to record highs in February 2011 helped fuel the Arab Spring in the Middle East and North Africa, pushing the issue to the top of the agenda of policymakers responsible for the region.

The Saudi-based fund will make private equity investments in food and agriculture projects as well as companies across various target countries in a sharia-compliant way.

It will be run by a joint venture between the Islamic Corporation for the Development of the Private Sector (ICD), a unit of the IDB, and Robeco, a subsidiary of Dutch bank Rabobank.

“The fund is the first public private partnership of this nature and size to address the inefficiencies and wastage facing the food and agricultural sector throughout our member countries,” Khalid Al-Aboodi, ICD chief executive said in a statement.

“Boosting regional food production, supply and trade, the fund’s investments will also lead to creation of jobs, transfer of technology, promotion of sustainable practices and poverty alleviation,” Al-Aboodi said.

The fund hopes to raise an initial $350 million by the end of the year to begin operations, targeting institutional investors as well as governmental and multilateral organizations and will have a 10-year term, Reuters reported.