PensionDanmark and PKA, two Danish labour market pension funds, have committed 200 million Danish krone ($29 million; €27 million) to a new 700 million krone fund aimed at increasing food production and food quality in developing countries.
The new Danish Agribusiness Fund is expected to attract a further 100 million in a second close, adding to existing commitments of 700 million krone, according to a press release. The fund will be administered by the Investment Fund of Developing Countries (IFU), a government-owned fund that has itself promised 212 million krone and is tasked with investing into developing countries alongside institutions for commercial returns. Another 88 million has been contributed by the government.
PensionDanmark said in a statement that the new vehicle is “expected to generate investments of close to DKr 6 billion in improved production, distribution and food sales in developing countries”.
Danish foreign minister Kristian Jensen described the fund, which will target projects along the food supply chain with Danish commercial interests, as necessary “risk capital”, adding that Danish agricultural know-how also has great potential to improve food production in developing economies: “Danish agricultural and food companies are among the most efficient in the world.”
PensionDanmark chief executive Torben Moger Pedersen said the fund was “a good example of how public and private capital can work together to address global societal challenges, as well as supporting domestic companies and investors.”
The fund will deploy its capital in Asia, Africa, Latin America and parts of Europe.