Co-funding $40 million, Fedgroup expands agri-finance across borders

Fedgroup is sowing new seeds, and this time, taking root further into Sub-Saharan Africa. As part of diversifying its portfolio and expanding beyond South Africa’s borders, Fedgroup has co-funded a $40 million agricultural investment alongside Verdant Orchards and the Danish development finance institution, IFU.

This expansion sees Fedgroup taking its first steps into Mozambique and Zambia, while also enhancing its operations in South Africa, with a focus on cultivating citrus and avocado crops.

This investment, which supports Fedgroup's ongoing mission to drive growth in the agricultural sector, is part of a broader strategy to mitigate the risks associated with South Africa's volatile economy by tapping into Sub-Saharan Africa's vast agricultural potential. Not only will this partnership grow export-focused crops, but it will also create over 1200 full-time jobs across the three countries, with sustainability and community upliftment at its core.

Warren Winchester, GM: Impact Investing at Fedgroup said, "This isn’t just about farming. It’s about creating opportunities in rural Sub-Saharan Africa, transforming communities, and ensuring we deliver on our mission of promoting sustainable development. We’re excited to be partnering with Verdant Orchards, whose long-standing success in African agriculture aligns perfectly with our investment strategy."

The investment includes the purchase of Noordgrens, a well-established citrus farm in Limpopo, South Africa. The 800ha property, complete with a modern packing facility, adds to South Africa's citrus export capability. Plans are already in motion to support the local community by constructing a school and installing solar streetlights on a dangerous road.

In Mozambique, Verdant Citrus Massingir will expand to 450ha of citrus orchards by 2025, while in Zambia, the Verdant Orchards Munyati project aims to transform 360ha of land into avocado orchards by 2026. This will position Verdant Orchards to capitalise on the global demand for high-quality avocados.

Barry Hawke, Chief Investment Officer at Verdant Orchards, explained, "This capital raise wouldn’t have been possible without the backing from Fedgroup and IFU. Their combined investment strengthens our financial base and accelerates our strategic growth, allowing us to become a leading force in Southern African agriculture."

Fedgroup’s involvement goes beyond just providing financial support. The company is deeply committed to sustainability, with plans to introduce regenerative farming practices, reduce chemical usage, and preserve biodiversity across the farms. Fedgroup is even considering placing beehives on these farms, and train community members in beekeeping to further support local economies.

Despite the complexities of navigating land rights and operational challenges across multiple African countries, Fedgroup remains confident in the project’s success. Thanks to a thorough due diligence process and local expertise from Verdant Orchards, the partnership is well-positioned to overcome the challenges that come with operating in foreign markets.

Winchester concluded by saying, “This expansion is a major milestone for Fedgroup, but it’s just the beginning. As Sub-Saharan Africa’s agricultural potential continues to grow, Fedgroup is well-positioned to continue its investment in projects that benefit both investors and the continent’s rural communities.”