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17 JUN 2016

DANISH FARMERS ABROAD – AFRICA NETWORK MEETING 17 JUN 2016

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169

IFU IN BRIEF

17 JUN 2016

Independent government-owned fund,

operating on commercial terms

1967

investment countries

invested in share capital and loans

Provides risk capital and advice

for projects having a Danish interest

146

Total contracted investments

of more than

18 bn DKK bn DKK

Leverage/mobilisation of capital: factor 9

Established in

Promotes economic and social progress

in developing countries

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IFU’S INVESTMENTS AND RETURNS

40 – 50 annual investments

New and additional financing

12.3 %

Investments in more than100 countries

Active portfolio of 221 projects

Average commitment of 5 - 7 years 1208

The average annual gross return

on share capital (2011 - 2015)

17 JUN 2016

Collaborated with

800 Danish Companies

43%

20%

37%

Large

Medium

Small

Size of Danish partner

IFU AS FUND MANAGER

17 JUN 2016

146 800m

WHAT IS DAF – DANISH AGRIBUSINESS FUND

investment countries in committed capital

investment period

Fund manager

DKK

5 years

17 JUN 2016

WHY AGRIBUSINESS?

Denmark is leading within agribusiness:

• Agribusiness is 2nd largest export sector

• The industry employs 140,000 people

• Danish agribusiness is leading in efficient and

sustainable use of resources

17 JUN 2016

• Based on Denmark’s strong position within agribusiness, IFU launched the Danish

Agribusiness Fund I (DAF) in January 2016.

• The Danish government and IFU have committed DKK 300m (EUR 40m), while PKA

and Pension Danmark have committed DKK 200m (EUR 53m) each.

• Commitments for additional DKK 100m (EUR 13m) is expected during a second close.

Source: Landbrug & Fødevarer

INVESTMENTS ARE NEEDED TO ENSURE A SUFFICIENT

FOOD SUPPLY

17 JUN 2016

2014 2025 2050

7bn

8bn

9bn

0 500 1000 1500 2000 2500 3000 3500

Developing countries

Near East and North Africa

Sub-Saharan Africa

Latin America

East Asia

South Asia

Regional per capita food consumption (kcal per capita per day)

2030

2015

1997 - 1999

To double food production in developing countries, annual investments of USD 83 billion

are required – an increase of 50 % compared to current level.

Source: FAO & WHO

• Today nearly 1 billion people are

suffering from chronic hunger.

• By 2050 the world population is

expected to be 9 billion – an increase

by more than 2 billion from today.

17 JUN 2016

DAF WILL OPERATE IN EMERGING MARKETS (DAC

COUNTRIES)

INVESTMENT STRATEGY

• Share capital and loan(1)

• Investments in the amount of EUR 2m – EUR 14m.

• Value creation through active participation in all stages

of investments’ life cycle leveraging IFU’s extensive

emerging market experience

17 JUN 2016

• DAF will be an active minority investor and is

expected to take seat at boards

• Involving Danish investors or suppliers (”Danish

interest”)

• Reducing risk through portfolio across geographic

regions and sectors

(1) Debt will be considered if the project offers a reasonable return and risk relation, and if debt is required in order to achieve the desired equity participation.

- Farm projects (crop farming, animal husbandry)

- Aqua culture (fish farming)

- Cleaning, drying and storage of farm produce

- Food processing

- Food packaging and logistics

- Whole sale and distribution of food

- Processing of offal and by- products from farms and food industries

WHAT MAY BE PART OF A PROJECT IN THE AGRICULTURAL

VALUE CHAIN? “FROM FARM TO FORK”

Projects in the early stages of the agricultural value chain

Projects in the later stages of the agricultural value chain

- Manufacturing of farm machinery and equipment

- Manufacturing of machinery and equipment for food

processing industries

- Production of animal feed, vitamins and other feed ingredients

Projects in the supporting industries

17 JUN 2016

IFU HAS A STRONG RECORD WITHIN AGRIBUSINESS(1)

76

Investments

12.2%

IRR Share Capital (gross)

1.9x

Times Money Back

(gross)

DKK 879m (EUR 118m)

Disbursed (SC)

17 JUN 2016

(1) Agribusiness investments from the period 1995-2014 and contracted participation above DKK 10m

71%

23%

6%

TYPE OF AGRIBUSINESS INVESTMENT (Share capital disbursed)

Food processing Primary production Supporting industry

IFU CREATES VALUE WITH DANISH PARTNERS WITHIN

AGRIBUSINESS

17 JUN 2016

17 JUN 2016

EXAMPLES FROM TRACK RECORD

Danper Trujillo, Peru

Activity: Production of asparagus in

cooperation with AHB Holding

Somawhe Estate, Zambia

Activity: Production of grains in

cooperation with Danish African

Development Co.

Poldanor, Poland

Activity: Production of slaughter pigs,

grain and feed in cooperation

with a group of Danish farmers

through Polen Invest A/S

17 JUN 2016

EXAMPLES FROM TRACK RECORD

Fan Milk, Ghana

Activity: Production of milk, yoghurt and

ice cream in cooperation with Fan

Milk International A/S

.

EXPERIENCED DEDICATED AGRIBUSINESS TEAM

Lisbeth Erlands

Vice President Europe and MENA

Jens Bayer

Investment Director

Max Kruse

Vice President, Agribusiness

• Has been with IFU from 1981 to 1984

and again from 1990

• Has extensive experience with

agribusiness investments, financial

restructuring, Central and Eastern

Europe and Africa.

• Four years as Group Deputy

Managing Director of Jos International

Breweries in Nigeria comprising large

scale farming operation.

• Has been with IFU from 1984-1987

and again from 1991.

• From 1987-1991 managing position in

Codan Gummi A/S.

• Extensive experience with

investments in a broad range of

countries.

• Key account manager for Haldor

Topsøe for more than 20 years

• Extensive experience with fertilisers.

• Has been with IFU since 2006 working

with sustainability issues.

• Prior to joining IFU, partner in a

sustainability consultancy firm

• Extensive experience with management

systems, communication and reporting

on sustainability issues.

Birgitte Bang Nielsen

Sustainability Director

17 JUN 2016

• Has been with IFU from 1991 to 2008 and

again from 2010.

• Has extensive experience with agribusiness

investments, financial restructuring, Central

and Eastern Europe and Africa.

• From 2008 to 2010 Managing Director of

Hedeselskabet Sp. z.o.o., Poland and

responsible for forest acquisitions in

Dalgasgroup A/S (Hedeselskabet).

17 JUN 2016

THE DAF INVESTMENT COMMITTE

Anders Obel

CEO, C.W. Obel A/S

Torben Möger Pedersen

CEO, PensionDanmark and

PensionDanmark Holding

Peter Damgaard Jensen

CEO of PKA

Peter Schütze (Chairman)

Former Managing Director of Nordea

Bank Danmark A/S

Chairman, DSB

Chairman, CBS

DAF HAS A GOOD PIPELINE WITH POTENTIAL

INVESTMENTS WITHIN THE AGRICULTURAL VALUE CHAIN

17 JUN 2016

• Examples of investments in pipeline:

• Pig production

• Machinery and equipment

• Fertilizer plants

• Chicken farms

• It is expected that with a broader mandate,

sourcing of projects could be increased

significantly.

• IFU’s extensive network within

agribusiness will facilitate sourcing.

DAF

IFC / WORLD BANK

DANISH FARMERS

ABROAD

INDIA AGRI-BUSINESS

FUND I

/ RABOBANK

SILVERLANDS FUND

37 ADVISORS

GLOBALLY

DANISH AGRICULTURE

AND FOOD COUNCIL

IFU HAS

CO-INVESTED

WITH 131 DIFFEREENT

DANISH PARTNERS

WITHIN

AGRIBUSINESS

EDFI ORGANISATIONS

PIPELINE OVERVIEW

17 JUN 2016

59% 23%

17%

1%

Regional distribution (weigthed amount)

Africa Asia Europe Latin America

26%

54%

20%

Sector distribution (weighted amount)

Primary production Supporting industry Food processing

As per January 2016

IFU CONTRIBUTES TO SUSTAINABLE DEVELOPMENT

17 JUN 2016

IFU’s tools to contribute to

sustainable development

Based on IFU’s

”Sustainability

policy”

Action plan to

minimise risks

and ensure

improvements

Tools to identify

risks and

opportunities

Follow-up through

annual reporting on

the results of the

efforts

IFU also offers specific advice on international guidelines and tools.

TYPICAL INVESTMENT MODEL FOR DAF

17 JUN 2016

Development bank

DFIs

Equity

DAF Danish

interest*

Food processing plant Local bank

Local

investor Equity

Loan/equity

Loan

* • Danish company supplying goods, technology, know-how, management or services;

• Indirect financial participation to the project company;

• Danish company sourcing products from the project company;

• Danish participation on the board or in the management team of the project company;

• Use of state-of-the-art Danish technology in the project;

• Direct or indirect job creation in Denmark;

• Etc.

17 JUN 2016