On behalf of IDH and Alliance for a Green Revolution in Africa (AGRA), Enclude has recently completed a report analyzing trends and lessons learned about how technical assistance can contribute to scaling investments in the agricultural sector. 

Agricultural transformation will be a key impact driver for development in Africa, and an essential part of achieving the Sustainable Development Goals (SDGs). In a context where public resources are increasingly under pressure, channelling more private investment into agriculture will be critical to achieve this goal. Blended finance, a facility structuring approach in which public development funds are leveraged to attract (additional) nonconcessional capital, will be required to transform the agricultural sector in Africa. Though blended finance has been increasing over the past years, only 3% of the value of blended finance initiatives is going to the agricultural sector. Addressing both the capital and capacity needs of smallholder farmers and SMEs - the backbone of the agricultural sector in Africa - is crucial to achieve agricultural transformation. In the light of the risks pertaining to agriculture, blended finance has the potential to play a crucial role.

TA is a capacity solution that can attract and support private investment and financing for agriculture by managing risk and reducing transaction costs. At the same time it ensures that other constraints hindering the growth of the agricultural sector that cannot be financed from private sources are addressed to create the right enabling environment. Targeted and coordinated TA, together with well-designed blended finance facilities, needs consolidated support to catalyse sustainable, inclusive growth in smallholder supply chains.