Abu Dhabi Investment Office has made separate investments into four agtech companies, the combined value of which could rise to as much as AED367 million ($100 million; €91 million).
The investments are structured as cash and non-cash incentives that include rebates of up 75 percent on research and development expenditure upon commercialization.
The four agtech companies include vertical farming firms AeroFarms and Madar Farms, as well agricultural inputs producer RNZ and drip irrigation company Responsive Drip Irrigation.
Funds have been drawn from ADIO’s AED1 billion AgTech Incentive Program, which was established last year as part of the Abu Dhabi government’s Ghadan 21 Accelerator Program, which will inject AED50 billion into Abu Dhabi’s economy.
“With these four investments we’re making, it’ll be about 40 percent of the total size of the fund,” ADIO director general Tariq Bin Hendi told Agri Investor.
Bin Hendi declined to go into the breakdown of the packages secured by each of the four firms, but did clarify that the share of the AED367 million they could draw depended on “how well they’re able to execute their business model.”
“Our primary goal is to attract them to Abu Dhabi and then to make sure we help them along the entire process, including commercialization and revenue generation – it will all be dependent. You could have a company that is expected to get $20 million out of that $100 million, but their business plan may change and they’ll come in with perhaps a smaller [sum],” he explained.
US-based AeroFarms will build an 8,200-square-meter vertical farming research and development center in Abu Dhabi as part of its role in the program, which is billed as the largest of its kind in the world.
AeroFarms co-founder and CEO David Rosenberg told Agri Investor the company has been looking at the United Arab Emirates for some time, as the region’s water and arable land scarcity, as well as the relatively lower price of energy, gives vertical farming a higher value proposition.
Rosenberg confirmed that in addition to drawing from the ADIO investment to finance the R&D center, the company will put its own money into the facility and partner firms will also invest into it through AeroFarms.
“We’ve grown about 800 different varieties of plants and we’re always looking at how to improve quality, grow new varieties, reduce capital cost, operating cost, and here, we’ll have research and development,” said Rosenberg.
He added: “Pollination – what’s the right way to pollinate 40-50 feet up in the air? Is it the honeybee, mechanical or manual? Best of breeding – how do we get the best class of seeds for the way we grow? Most breeders focus on drought resistance and pest resistance. Here, we’re able to think about taste, texture, nutritional value and yield.”
UAE-based vertical farmer Madar Farms, meanwhile, will build an indoor tomato farm, while drip irrigator RDI will develop a bespoke irrigation system for UAE agriculture. Inputs producer RNZ has set its sights on an R&D center of its own “to research, formulate and commercialize agri-input solutions that will help to grow more with less,” said a statement from ADIO.